Dorian LPG, a US-listed owner of 20 VLGCs, confirmed on Wednesday expectations for a strong set of financial earnings created last week by the announcement of a dividend boost.
The company posted net income of $20.3m for the three months ended 30 September, up from $14.1m in the same period last year.
Excluding one-off items, such as unrealised gains from derivative instruments, adjusted net income climbed at an even steeper pace to $17.2m from $9.9m.
“The second quarter’s results were supported by a strong freight market and resulted in good cash generation,” chief executive John Hadjipateras said in an earnings statement.
A “healthy VLGC supply-and-demand balance and strong bunker prices supported continuously positive freight rates,” the company explained.
Dorian LPG had already given a taste of its healthy earnings on 27 October, when it announced an “irregular” dividend of $40.4m.
That payment brings total cash returned to shareholders since the company’s initial public offering in 2014 to almost $500m, Hadjipateras said on Wednesday.
The Stamford-based company has been making strong profits in healthy VLGC markets.
Higher spot rates accounted for the biggest part of its profit increase, with the company’s time charter equivalent earnings jumping by almost one-third year on year to $40,632 per day.
In a market influenced by congestion in the Panama Canal and the redrawing of trade patterns in the wake of the Ukraine war, VLGC rates have continued climbing in the current quarter, soaring to near two-year highs approaching, in some cases, $100,000 per day.
To capture that trend, Dorian LPG announced on Wednesday that it is extending the long-term employment of two of its scrubber-fitted vessels.
An unidentified oil major agreed to extend a time charter for the 84,000-cbm Corsair (built 2014), which began in November 2019, for two years through to the fourth quarter of 2024.
Separately, Dorian LPG exercised an option to continue chartering-in the 80,900-cbm Future Diamond (built 2020) for two years, through to the first quarter of 2025.
Current conditions may be profitable but also give cause for concern, Hadjipateras cautioned.
“Current geopolitical and economic uncertainty call for prudence,” he said.
“I believe that maintaining focus on our mission to provide safe, reliable, clean and trouble-free transportation services to our clients, and on financial discipline, comprise the arsenal which enables us to retain flexibility in our commercial decisions and provide the best returns to our shareholders.”
