Greetings! And welcome to the Dorian LPG, Second Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. As a reminder, this conference is being recorded. Additionally, a live audio webcast for today's conference call is available on Dorian LPG's website, which is www.dorianlpg.com. I would now like to turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.

Thank you, Vikram. Good morning, everyone, and thank you all for joining us for our second quarter 2023 results conference call today. On the line today with me are John Hadjipateras, Chairman, President and CEO of Dorian LPG Limited; John Lycouris, Chief Executive Officer of Dorian LPG (USA); and Tim Hansen, Chief Commercial Officer. As a reminder, this conference call webcast and a replay of this call will be available through November 9, 2022. Many of our remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe, or similar indications of future expectations. Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors, as well as general economic conditions. Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we express today. Additionally, let me refer you to our unaudited results for the period ended September 30, 2022, that were filed this morning on Form 10-Q. In addition, please refer to our previous filings on Form 10-K where you'll find Risk Factors that could cause actual results to differ materially from those forward-looking statements. Finally, you may like to refer to the investor highlights slide posted this morning on our website as we go through our remarks this morning. With that, I'll turn over the call to John Hadjipateras.

Thanks, Ted. Thank you for joining us. Ted and John are in Hamburg. Tim and I are in Houston. I will give a brief introduction and then open immediately for questions when you can access my colleagues directly. Including our recent dollar dividend declared on October 27, we will have returned nearly $500 million to shareholders since our IPO. Our board has focused on returns to shareholders while retaining commercial flexibility and ensuring a strong balance sheet. We've often been asked why we call our dividend irregular, to distinguish it from extraordinary and a regular dividend. That term is not our invention. It was more often used in the past and Ted can elaborate on its history. We use it because we consider it a more accurate way for a shipping company to describe the prospects for future dividends. Our board prioritizes return to shareholders consistent with a strong balance sheet and value creation. We are confident in our sector's relevance in the energy mix and in our role in the supply chain and returns over the lifetime of our assets. But we acknowledge that even in the best of times, volatility makes it impossible to make reliable, medium-term predictions over the freight markets. The TCE achieved per calendar quarter was $36,858, and our OpEx was $9,541. Cash G&A was $5.8 million and cash interest expense was $6.4 million, down from $6.5 million reflecting favorable hedges and fixed-rate debt. Ted will answer questions regarding our financials. Our shore-side teams have continued their hard work to ensure the safety and well-being of our seagoing staff, including our Ukrainian and Russian seafarers and their families, many of whom face extraordinary challenges. Difficulties in handling crude changes continue. China remains unavailable as a location to perform crude changes. Overall, however, the number of ports that allow crude changes has increased in comparison to the previous period. LPG export and import demand increased in the third quarter of ’22. Global exports are up 5.4% year-over-year, with support from Canada and the Middle East. North American production continued to increase. A relatively quiet market over the summer and into fall put some pressure on freight rates. Despite the summer dollar grants often seen across tanker segments, the VLGC market kept a steady floor above cash breakeven level, and the recovery was swift. This indicates a well-balanced market, supported by strong underlying fundamentals. The heavy fuel oil, low sulfur oil spread is currently about $260 per ton in Houston, down from $320 at the close of last quarter. We have managed the volatility in bunker price as well, and this has contributed to our strong earnings this quarter. Tim and John will answer any questions regarding our view of the freight and product markets going forward. In the meantime, here are some highlights. Despite lower than expected propane demand in China for ethane production, 2022 is forecasted to have about 4.7 million tons more of incremental LPG consumption compared to 2021. This was achieved in spite of only six out of ten expected new PDH plants coming online this year. LNG spiking in Japan and South Korea is expected to increase LPG production over the winter. South Korea is expected to import about 800,000 metric tons of LPG in addition to counter the high LNG prices. Meanwhile, Japan has imported 43% more year-on-year during the first half of ’22 for City Gas Consumption. Similarly, in Europe, we have seen some substitution of LNG - LPG for LNG. North European substitution with rebound volumes from the U.S. continues to add about four VLGCs a month. Despite the fact that more LNG ships are going to Europe rather than through the canal to Asia, the Panama Canal has remained congested, adding on average more than 10 days to voyages both south and north-bound, up from five in the last quarter. And while the VLGC order book next year is significant, increased export volumes coupled with canal congestions and fleet slowdown will likely help absorb most of the new tonnage. Our outlook for the calendar year, for the final quarter is positive. Estimates for U.S. exports point to further growth in ’23 and ’24. In its October short-term energy outlook, the EIA estimated that U.S. LPG exports will grow 8% in ’22 and 11.3% in ’23, up 1% and 1.3% from July’s estimate. The U.S. LPG production is now estimated to grow by 6.1% in ’22 and 4.8% in ’23. The 2023 IMO emission regulations EXI and CII will come into effect in January '23 and will establish strict power limitation and carbon intensity limits to be complied with annually from then on. Our performance and new technology team have been diligently preparing our fleet and shore-side operations for these regulations, including retrofitting energy-saving devices and developing and harnessing new software to manage fuel consumption. As Ted said, you can see more on our investor highlights, and we're here for any questions that you may want to ask. Thank you again. Vikram, I’ll give it back to you.

Thank you. With the prepared remarks completed, we will now open the line for questions. We have a first question from Omar Nokta with Jeffries. Please go ahead.

Thank you. Hi John, hi Ted! You know obviously just another solid quarter and just another irregular $1 dividend. You know I wanted to ask a bit obviously, you know the market's really strengthened here over the past several weeks and just wanted to get a sense from U.S. As you think about how things have developed here and when we think about the $1 dividend that you just announced. Do you base that off of the financials from this past quarter and how that ended, or was it a bit of looking forward as well? And I'm just simply asking, so that maybe we get a sense of perhaps what you're thinking in terms of the next quarter, considering it seems likely that you're going to have a record result in the fourth quarter or calendar fourth quarter. And so I just wanted to get a sense from you is how you approach that $1 irregular dividend for this quarter given that earnings were lower than that, and there weren't any capital gains that came in for you to pay out. So just kind of – a bunch of words out of my mouth, but just wanted to get a sense from you how you came out with $1 and then what can we expect going forward?

Fair question, Omar. I’ll let somebody else answer the question as it relates to what we see in the market in the next quarter. Obviously the current quarter will be very good, and we did have that visibility when our board made the decision for the dividend. So generally – well not generally, invariably we do not count our chickens before they are hatched. But you cannot buy - we take everything into consideration each time. This is why we don't call it regular. It's not formulaic. It's based on the judgment of our board at each quarter to decide how best to deploy our capital and our cash reserves.

Okay, one of the things, that's pretty clear, yeah – sorry John, I cut you off.

No, I'm just – I was going to invite Tim to give you a sense of where the market is now and how we see it in the next few weeks.

Yes, of course we – from when we had the board meeting and decided on the dividend, the market has just gone one way, which is which up and very fast, and we see this for the coming period to maintain the firmness and also into the first quarter of – well into the first quarter of ’23 if not all of ’23 first quarter. As we see the demand in Europe and due to the unfortunate war in Ukraine, this is helping our markets and also now we are seeing the Panama today that John was mentioning earlier, going up to 20 days now at the moment. So this creates a lot of distraction in the market and a lot of inefficiencies in the market, and also a better trading environment for the traders and so we believe that the demand should stay firm, at least for the short period.

Okay. Thank you, yeah. And I guess maybe just a bit more, I guess bigger picture. How do you think about the fleet deployment at the moment? As we go into – you know these next several months look to be very strong, but there are a good amount of deliveries coming in next year. How do you think about that? And then also I noticed, you exercised an option to charter in a vessel for an additional two years, but then also extended an existing contract for two years that you had out. Was that done on a like-for-like basis or are they completely sort of separate from each other?

Yeah, I would say they are separate from each other. The extension of the charter in was a rate that was done in 2018 when we did the charter party. So that rate is very different from today's market, and you can say the extension of the time charter out is with one of our key customers, which we enjoy a good relationship with, and at a rate that was in line with today's term market. So we do take some coverage in the market, but in general we believe that in ’23, even with a high number of new billings coming in, with the increase of production in the U.S., and with the delays we are seeing and with that production, mainly going to the east, this is a long haul. And then on additional, the slowdown of the – merger of the fleet at least with the EXI regulations and the CII compliance that we will have to take into account from 1st of January. This will have a significant impact on the fleet and the demand for our vessels. So in our mind, the market looks okay for ’23 and we are there to take more, you can say assets in on time charter if we see the right opportunities, but of course also we do try to keep a little bit of ships out on term as well to have a balance on our book here. But for ’23, in our opinion the production and the shutdowns will be able to absorb the array of ships coming into the market. So we do see ’23 sort of positive.

Got it. Okay, thanks for that color Tim and also John, thank you and Ted thanks. I’ll see you guys.

Thanks, Omar.

Thank you. Your next question is from Brian Reynolds with UBS, please go ahead.

Hey! Good morning John and Ted. Maybe to start off; just want to talk a little bit more about the spiking opportunities for LPG. Maybe on the upside demand of the equation, you know you talked about demand that you're seeing potentially from Korea and Japan in terms of spiking. Curious if you could just put it maybe in perspective of like a percentage uplift relative year-over-year, all things equal. Like what is the potential uplift in terms of overall like seaborne LPG cargos being lifted this summer or this winter from potential LPG spiking. Thanks.

Thanks for that. Thanks. Tim, we addressed that a little bit in the written remarks and they were prepared remarks, but I don't know if we calculated that in the ships.

Yeah, it will be. The categories in Europe I would say is about the four VLGCs lifting a month, and a round trip, U.S. to Europe is about a month. So you can say – so that's about four ships equivalent. And for Japan and Korea, it's of course a seasonal thing, especially for Japan, filling up for the winter. So that will tail off later in the – when we get into the spring at some point, once you get through the winter and the stockpiling. But you can also say that a lot of these resources, as it was also mentioned by John, that PDH demand, in fact, there has not been or is not at its full capacities, or some of it is replacing these demands. But it is additional seaborne requirement for this and also what we see as the consumption from Ukraine and Poland and other countries that were supplied over land from Russia. This is also replaced by VLs going into the storages in Carlson and other places and then shipped by smaller ships into Poland. So that is also a new demand that is created, and that’s about, I think, two VLs a month that we see going into cover that at the moment. So there’s definitely new uses and new demands happening.

Great! I really appreciate that color. So you maybe talked about four cargos for the spiking up and then two cargos going to Europe. You know, I want to touch on the chemical demand aspect of it. You know what are you seeing? You highlighted previously a lot of new PDH capacity coming online over the next few years. It may take a while for that capacity to fill in. You know how many cargos are you – you know how do you see that demand filling up over the next few years? Do you really need to see an economic recovery, and are you seeing any early green shoots given the potential for China reopening over the next couple of months? Thanks.

Yeah, I think you said yourself, China is a difficult one to repay when they will go away from the policy of zero tolerance on COVID, but these plans are coming and they are running even at reduced rates. So we are still seeing consumption grow, but not as rapidly as we had hoped. But there is definitely a big potential upside once China gets either control over COVID or eases the regulations on that. And I think LPG doesn't seem to be as hard hit on it, even though you have a bit of an economic slowdown and so on as some other products, as there is a general demand for these plastics produced. So we see this as an intermediate problem that will go away in the near future, and we will see more production and more demand from the PDH plant. But it can take – it's hard to say with the Chinese, how long they will take before they come back.

Great! I totally understand and I appreciate the color. Maybe just as a quick last follow-up, you talked about some congestion in the Panama Canal like we've seen in the past few years. You know curious if you have any updated comments around – or views around the potential LPG pipeline that could span the Panama Canal. Any updated views there on whether you're seeing some traction out on that happening? And then you know I guess just beyond that, do you see that as a potential solution towards the congestion or do you think it's really not – maybe not worth the timing spent? Thanks.

Yeah, I think there's nothing really new on the pipeline, but when we looked at it in the past, the volume that it could handle and the applications was not a game changer I would say, so it would be able to maybe solve the problem for a few, where this is – but again, you would have the short haul on one side and the storage issues and the meeting of the – did they cancel the other sides, so the total capacity was not something that we saw as a game changer, but I don't have any recent update on the progress of the pipeline.

Okay. I'll leave it there. Thanks for taking the time and enjoy the rest of your morning. Thanks.

Thank you. Thank you very much.

Thank you. Ladies and gentlemen, that concludes our question-and-answer session and I'd like to turn the call back over to John Hadjipateras, Chairman and CEO for closing remarks. Over to you sir.

Thank you very much, Vikram. So thank you all for joining us. Wishing you a good holiday season coming up and look forward to speaking to you again next quarter. Thanks. Bye-bye.

Thank you. Ladies and gentlemen, this concludes today's conference. You may disconnect your lines at this time. Thank you for your participation.