Good day, everyone, and welcome to the Dorian LPG First Quarter 2025 earnings conference call. As a reminder, this conference call is being recorded. Additionally, a live audio webcast of 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, Mickey. Good morning and thank you, everyone, for joining us for our first quarter 2025 results conference call. With me today are John Hadjipateras, Chairman, President and CEO of Dorian LPG Limited; John Lycouris, Head of Energy Transition and 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 August 8, 2024. 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 expressed today. Additionally, let me refer you to our unaudited results for the period ended June 30, 2024, that were published 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 find it useful to refer to the investor highlights slides posted this morning on our website as we make our remarks. With that, I'll turn over the call to John Hadjipateras.

Thanks, Ted, and thank you all for joining us to discuss our first quarter financial 2025. We had a strong first quarter with net income of $51.3 million. During the quarter, our equity offering materialized our significant strategic objective, further enhancing the strength of our balance sheet and positioning the company for future growth and fleet renewal. As mentioned last quarter, we have one VLGC/VLAC on order from Hanwha shipyard, and we are investing in some retrofits for ammonia carriage on our existing ships. Our Board declared a $1 irregular dividend, bringing the total capital return since our IPO to more than $777 million. We believe that our strong balance sheet and good debt profile enable us to pursue opportunities when we determine that the timing is appropriate. As you will hear from both Ted and Tim, margin volatility featured again during the quarter and continued in July. We believe that these swings do not reflect any significant changes in the fundamentals of supply and demand for VLGCs; rather, they define a near equilibrium where small changes can result in big price swings. Factors such as restrictions on restoration of Panama transits, weather events in the US Gulf, and the ongoing conflicts in the Middle East and the Black Sea alternately increase or inhibit our quarterly earnings, but the underlying fundamentals point to continued growth in the trade of LPG. 56 VLGCs have been added since the beginning of 2023, increasing the fleet by roughly 16% to 394 ships today, while in 2023, global liftings were about 12% higher than in 2022. So clearly, the various disruptions have been contributing to profitability. Looking ahead, we expect five ships will be delivered in 2024 and 13 in 2025, increasing the fleet by 1% and 3% respectively in each of those years before larger increases again in '26 and '27 in anticipation of potential demand for ammonia transportation. Meantime, the prospects for increased production and exports from the US are favorable, as are the indicators for demand in Asia and elsewhere. These fundamental factors underpin our development prospects for VLGCs. As you will hear from John L., our teams are working on reducing emissions and fuel and operating costs for our fleet. We have embarked on a top-down initiative to simplify and revamp onboard safety procedures. Our fully integrated structure provides a real benefit in our pursuit of these objectives. As always, I acknowledge our dedicated seafarers and shoreside staff whose hard work and dedication make our results possible. Now I give you, Ted.

Thanks, John. Today, I will discuss our recent capital allocation actions, financial position, liquidity, and our unaudited first quarter results. As of June 30, 2024, we reported $353.3 million in free cash. The substantial increase from March 31 is due to the net proceeds from our equity offering and robust free cash flow, minus the dividend paid during the June 30 quarter. Additionally, as previously announced, we will distribute another $1 per share as an irregular dividend, totaling approximately $43 million, on or around August 21, 2024, to shareholders of record as of August 8. With a debt balance at the end of the quarter of $597.1 million, our debt-to-total book capitalization ratio was 34.8%, and our net debt-to-total book capitalization stood at 14.2%, which could be even lower when considering our short-term government bond holdings. Our weighted average cost of debt is roughly 4.7%, which is below the current one- and three-month SOFR rates. Our next refinancing event isn’t until the end of December 2026 for our bulk cap facility. We have amortized approximately $13.4 million in principal each quarter, totaling around $53.5 million for this fiscal year, which we find quite manageable and in line with our book depreciation. With well-structured and cost-effective debt, an undrawn $50 million revolver, and one debt-free vessel, along with our strong free cash position, we maintain a comfortable level of financial flexibility. We anticipate our cash cost per day for the upcoming year to be about $26,000 per day, excluding capital expenditures for special surveys and upgrades. I will address those details shortly. For our first quarter results, you may want to check the investor highlights slides posted on our website this morning. I would also like to remind you that my comments will include terms such as TCE, operating days, available days, and adjusted EBITDA, so please refer to our filings for their definitions. In terms of our first quarter chartering results, we achieved total utilization of 90.4% for the quarter, with a daily TCE per operating day of $55,228, resulting in a utilization-adjusted TCE, or TCE revenue per available day, of about $49,900. Although this is lower than last quarter’s results, the TCE still represents an attractive free cash flow to equity. Our entire spot trading program is managed through the Helios Pool, which provides the best measure of our spot chartering performance. For the June 30 quarter, the Helios Pool earned a TCE of $50,145 per day for its spot and COA voyages. On page 4 of our investor highlights material, you can see we have five Dorian vessels on time charter within the pool, plus one of our MRL Energia vessels, indicating spot exposure of roughly 80% for the 30 vessels in the pool. Looking at the quarter ending June 30, 2024, we currently have nearly 50% of the available days in the Helios Pool booked as of September 30, 2024. Given the challenges in predicting loading dates and their significant impact on our revenue recognition, we think it’s more appropriate to share TCE revenues across all available days in the pool for the quarter. Based on that, we expect a TCE in the range of $30,000 per day on a load-to-discharge basis according to US GAAP. This rate includes both spot fixtures and time charters in the Helios Pool only. Daily operating expenses for the quarter were $10,618, excluding minor expenses related to dry-docking. That amount increased slightly sequentially from last quarter.

Regarding our revenue net recognition, we believe it's more suitable to present TCE revenues over all available days in the pool for the quarter. Based on this, we observe a TCE in the vicinity of $30,000 per day on a load to discharge basis according to US GAAP. This rate incorporates both spot fixtures and time charters exclusively in the Helios Pool. Daily OpEx for the quarter was $10,618, not including minor expenses for dry-docking. This figure experienced a slight increase compared to the previous quarter.

Operator, we can move on to Tim Hansen and pick up Ted when he gets back online.

I'm back online now.

So do we have Ted online or not?

We don't have Ted at this time.

Okay. So why don't we have Tim continue the presentation and then we'll go back to Ted when he comes back. Tim?

Hi, good day, everyone. Tim Hansen here, Chief Commercial Officer. The quarter ending in June 30, 2024, saw an improvement in the freight market compared to the quarter prior. The biggest improvement was seen in May when freight rates in the West were reminiscent of those seen in early January. April and June were relatively weaker months, characterized mostly by external factors disrupting regular market movements such as dynamic fixing windows, sudden changes to the Panama Canal waiting time, and an efficient balancing of vessels demand versus vessel supply. Despite significant swings in the market month to month, the underlying demand for VLGC shipping is firm. April is not usually analyzed at first glance. The market for the month is reflective of commercial decisions made as early as February and as close as a few days prior to loading dates. This is explained by many market players initially anticipating a weaker than usual export demand from the US Gulf and then correcting their approach when it became clear that export cargoes were plentiful. Thus, cargoes and similarly rates were seen fixed at levels over $30 per metric ton, which speaks to the strength and strong fundamentals of the VLGC market. May built on the strong fundamentals but hit particularly higher freight levels because of a sudden but very brief period of congestion in the Panama Canal. Auction prices for transit reached levels not seen since December 2023, but the bottleneck was quickly resolved. I can reach a certain delays in the Panama Canal giving the market a bump reflects positively on the fundamentals of the VLGC market, but we may have demonstrated how external factors can start a short-term bounce in the markets. June versus the months showed the flip sides. Throughout June, it must be emphasized that West to East arbitrage was positive. Nonetheless, rising Mont Belvieu prices over the month dominantly narrowed the arbitrage, slowing the market as charters were looking to find a rate to slow. The Mont Belvieu prices were on the rise due to a reduction in available spot cargoes. The reduction has been attributed by market players to downtime on the chillers amidst a heat wave in North America and capacity reduction in the US Gulf terminals in anticipation of Hurricane Beryl at the end of June. Meantime, it can be mentioned that in the Arabian Gulf Far East market, we have followed the trends of the US Gulf export market. Particularly in May, we could see that charters reacted to the strength in the West market, paying off on freight to ensure that VLGCs would be available to load in the Arabian Gulf. When the Western Premium eroded in June, the Middle East export market duly followed downwards. Though the quarter showed significant swings in the market over the months, the underlying red threat is one of robust demand for LPG in the Far East and an open arbitrage. The sensitivity to available export from North America was made clear, but it should be noted that North America in the key production and export continue to grow. Meantime, most market players anticipate a gradual return to congestion in the Panama Canal. Despite healthy fundamentals for VLGC demand driven by growing ton-miles and robust import demands, there are challenges to the market in the short term. The reduced availability of spot cargoes from the US Gulf seen in June has a considerable knock-on effect. Delays at export terminals due to Hurricane Beryl continued into July and the declarations of force majeure by various terminals seriously hindered the optimization of export capacity. Amidst a nearly full Panama Canal enabling Chinese to converse near to the US Gulf and an increase in the backlog of vessels, delays at the terminals were an unwelcome complication. Lastly, the tragic events from 10 days ago when a capsized tugboat in the Houston Ship Channel limited the market's corrective movements to normalize the export levels. Finally, returning to the demand for VLGC shipping, we're eager to see the effects of the seven opening of PDH plants in China. North American exports, external factors aside, are for the most part forecasted to grow as is the congestion of the Panama Canal. Thus, we do remain positive on the medium to long-term prospects for our business. With that, I will pass you back to Ted, maybe.

I think we'll start with John, and then Ted will come back online to wrap up after John Lycouris. Thank you.

Thank you, John, and thank you, Tim. In continuation of our commitment to sustainability, Dorian LPG strives to improve the energy efficiency of its vessels with a focus on operational and technical performance while continuing to follow and employ technological advances and innovations as they become commercially available to the marine sector. Our scrubber vessels savings for the second quarter of 2024 amounted to $2.8 million or about $2,561 per day net of all scrubber operating expenses. Fuel differentials between high sulfur fuel oil and very low sulfur fuel oil averaged $136 per metric ton. While the differential of LPG HSFO fuel versus VLSFO, very low sulfur fuel oil, stood at about $217 per metric ton, which is quite advantageous for the dual-fuel LPG engine vessels. The total number of vessels fitted with scrubber units in our fleet is 14, and we're about to retrofit another vessel in the current calendar quarter during the vessel's irregular dry-docking window. The CII project initiated by the Mærsk Mc-Kinney Møller Center for Zero Carbon Shipping focuses on engaging with the aim, with the IMO for review process of the carbon intensity indicator. The objective is to propose process improvements in carbon reduction targets for the next phase, which begins in 2026. The project group's goal is to provide clear recommendations to the IMO on necessary amendments and updates to the CII regulation for greater effectiveness in the next phase. The Center presented the project findings at the last MEPC meeting in March 2024 and anticipates preparing two papers for presentation at the next MEPC session in October, where there's hope they are agreed for revising the CII regulation ahead of its 2026 amendment window. Dorian LPG is a mission ambassador to the center and has actively contributed to this project. The new biofouling management plans, which were adopted by the IMO by an IMO resolution last year, are currently being developed for the entire Dorian LPG fleet. The key points of these new biofouling management plans comprise monitoring how and fuel performance caused by biofouling, taking actions to alleviate biofouling, and finally logging the actions taken. This entails shore and crew training and familiarization with the biofouling risk parameters and the actions which must be taken proactively and/or reactively to mitigate adverse performance results. We expect to complete the biofouling management plans for the whole fleet by the end of August 2024. The European Union has adopted FuelEU Maritime Regulation to promote the use of renewable fuel and low carbon fuels in maritime transport. This regulation aims to reduce greenhouse gas emissions by providing a clear legal framework for ship operators and fuel suppliers, thereby increasing the demand for and consistent use of cleaner fuels in the maritime sector. The regulation sets targets for the greenhouse gas intensity of energy use in vessels. Companies are required to submit electronic monitoring plans that document the methods of monitoring and reporting, which will be subject to third-party verification by accredited independent entities to ensure their accuracy. Recently, assisted ship propulsion system technologies have attracted considerable interest in the maritime industry to potentially reduce fuel consumption and emissions from vessels. These systems use wind power to supplement vessel propulsion by creating dynamic forces by tapping into an unlimited, free, and zero carbon energy source, as it is called, and can significantly improve the efficiency of maritime operations and support the industry's decarbonization goals. Various sailing technology concepts are being developed or have been developed, such as water sails, wing sails, high sails, and suction sails. Each technology has a different method of harnessing the wind and producing thrust, necessitating a full analysis and investigation to assess their potential and implications for safe operation and trade. If installed, we will continue to monitor developments and results of this technology in the future. And now I pass it back to John Hadjipateras and Ted?

Thanks, John. I'll quickly finish off my remarks with an apology for the technical issue. We'll be sure to pay our phone bill next quarter. So very quickly, just to summarize, I believe I was cut off just talking about the Helios Pool. The pool had roughly $11 million of cash on hand at the end of July, reflecting the dividend just paid. To recap, we've now paid $13.50 per share in dividends since September 2021. Again, we want to remind you that these dividends are irregular. Our market and our business is not regular, and therefore, our dividend policy is not either. Total capital returned from dividends, open-market repurchases, and our self-tender now totals $777 million gross. I'd probably like to note that the dividend payment reflected our strong earnings and cash flow generation. And at the same time, we were able to accomplish our strategic objective of raising additional equity capital to increase our financial flexibility as we look at fleet renewal and expansion. I think that underscores our Board's commitment to balancing returns to shareholders with growth in the business. Again, we remain optimistic about the prospects for our business as my colleagues have outlined. And with that, I'll turn the call back to John Hadjipateras.

Thank you, Ted, and apologies again to everyone who joined us. I hope we didn't distract too much from the very good presentations by my three colleagues with lots of material for you to hopefully digest. And Mickey, we're happy to take questions now if anyone has any.

We will take our first question from Omar Nokta with Jefferies.

Good morning, everyone. I have a couple of questions, specifically regarding the fluctuations we've noticed in the VLGC market, particularly in July. John H, you mentioned these swings earlier, and I wanted to explore them further. Tim, you pointed out various factors influencing this, such as the Panama Canal's return to normal, Hurricane Beryl in the Gulf, and volumes from the Middle East. Can you rank or highlight which of these factors has had the most significant impact on the market? Also, what do you foresee that could help ease these issues in the future?

A million-dollar question. Tim, I think you are the best of us to answer that one.

The main issue has been US Gulf production, which faced challenges in June due to delays related to chiller problems and some force majeure situations. This resulted in reduced exports, and with the terminals operating near full capacity, any issues can lead to long recovery times. Even now, there is still a backlog of three to five days at most terminals, which makes it hard for them to clear the ships and resume normal export levels. Additionally, in June, the delays I mentioned at the Panama Canal coincided with a surge in vessels heading straight to the canal after it reopened fully in May. This meant that there was no backlog of ships moving from June into July. However, the issues from June and incidents like Hurricane Beryl and the capsize in the Houston Ship Channel exacerbated the problems. Moving forward, any disruptions at US Gulf ports will likely take longer to resolve than they did last year because they are closer to capacity. Regarding the Panama Canal, we've observed a rapid shift from significant congestion to being fully open. However, I anticipate that the congestion we've experienced at the Panama Canal in recent years will return this fall and continue into the winter, likely clearing out by early spring.

Okay. Thanks for that. I just wanted to say the winters are good.

No, no, I'm I would just say it's ironic that in the winter we had the delays caused by a freeze and in the summer, we have delays caused by the chiller, but which is because of the heat waves and the extremes of weather are pretty impactful. Again, when you're running at close to full utilization and the export infrastructure.

Yeah, that's a good point. So just on that then in terms of, say, the backlog that has been hampering activity from Beryl in the Gulf Coast. Have we started to work through that? Has it improved from, say where it was, I guess, perhaps a month ago when that happened?

The terminals are fully operational and producing, and they have returned to their previous export levels while working to clear the ships that have been waiting due to late cancellations. We are noticing that the delays associated with loading the already booked ships are decreasing. This should hopefully enable the terminals to catch up within this month and create more availability afterward. We anticipate that they are back to full capacity now and that it may be possible to extend operating hours eventually, provided everything continues to run smoothly without further incidents or issues.

Got it.

We have two more activities now for August.

Okay. Yes. So perhaps we might start to see a reversal potential. You mentioned earlier that you had booked a significant amount of Helios at over 40, but ended up realizing 50. With this 30,000, how do you think it would adjust on an operating day basis? I know you said it's challenging to determine the actual operating days, but do you have any estimates? Could that 30 increase to 40, or are we looking at it maybe rising to 33, with you being open to adjusting?

It's really difficult to determine, Omar. I would like to believe there is potential for that number to increase. The upside we encountered last quarter took us by surprise. However, this situation is quite complex. I understand you are aiming for a solid figure for the quarter. I would suggest that Tim's remark about increased activity might lead to some benefits this quarter, while others could extend into the next quarter. Therefore, I cannot provide a clear answer to your inquiry. That said, it appears that the trend is leaning above that number. The extent to which we'll achieve this quarter from an accounting standpoint as opposed to mix remains somewhat complicated.

Understood. I appreciate that. And sorry if I'm going long in my session, but just maybe one more now. And I'll let you go. Just obviously, in terms of the equity issuance back in June, any thoughts or anything you're willing to say in terms of kind of plans with that extra $80 million or so of proceeds? It's obviously on the balance sheet, but just anything you're willing to share on thoughts of that?

There's nothing specific that we can share at this time. There are no active plans currently, but we are exploring opportunities that we believe could effectively utilize the funds. We'll keep you updated if anything materializes.

Thank you. And this will conclude our Q&A session. I'll now turn the call over to John Hadjipateras for closing remarks.

Well, thank you for coming on a summer day to listen to us and have a good rest of the summer. Bye, bye.

And this does conclude today's program. Thank you for your participation. You may disconnect at any time.