New York-listed Dorian LPG's latest earnings guidance for the third quarter has come in below analysts' expectations.
The owner of 22 modern VLGCs said time-charter equivalent revenue should come in between $53m and $55m to 30 September.
Vessel operating expenses, including dry dock-related costs, were predicted in the range of $21m to $22m. Utilisation is expected to be 97.4%.
Norwegian investment bank Fearnley Securities said the guidance was slightly below its estimate.
Based on the middle of the revenue range for 2,126 available days, time-charter earnings should be about $25,500 per day, yielding Ebitda of between $26m and $27m.
The current Ebitda consensus is $36m, which Fearnley considers "too optimistic", given comments from peers during the second-quarter earnings season and rates observed so far.
"For comparison, the numbers are marginally below our previous estimate, having expected Dorian to report similar numbers in the high $20,000s," Fearnley said.
The investment bank has maintained a "hold" rating on the stock with a target price of $8, below recent prices just under $9.
Eastern market muted
The Baltic Exchange's VLGC index was stable at $62.43 per tonne on 22 October, which is the equivalent of $52,337 per day and much stronger than in the third quarter.
VLGC activity in the eastern market has been subdued in recent days and rates there have come off slightly, Fearnley said.
Expectations are for activity to pick up again with the release of the Saudi acceptances, analysts Espen Landmark Fjermestad, Peder Nicolai Jarlsby and Ulrik Mannhart said.
"However, we are still yet to see any real momentum, which in our view is largely down to Saudi Arabia allocating cargoes towards the second half of the month."
In the West, there have been a few fixtures, with a handful of enquiries left uncovered for the end of November and early December, Fearnley said.
Availability is said to still be tight for November, while for early December positions, several vessels have not yet reached discharge ports, leaving uncertainty.
"New fixing remains difficult, which is likely to keep the market firm for the time being," the analysts said.
VLGC bought back
Connecticut-based Dorian also said it had completed the repurchase of the 82,200-cbm Captain John NP (built 2007) from Japanese sale-and-leaseback interests.
The debt balance of $18.3m was paid off.
The company exercised an option to buy the VLGC in August.
Dorian paid $18m, in addition to applying a $26.6m deposit on the ship. This implies a total price of $44.6m, but the financier was not revealed.
According to securities filings, the company refinanced the ship in June 2018 by selling it for $48.3m and chartering it back for six years. The deal also required Dorian to buy back the vessel by 2024.
Maritime Strategies International and VesselsValue estimated the Captain John NP was worth between $36.1m and $37.7m in August, on a charter-free basis.
