Dorian LPG confirmed on Wednesday expectations for extra cash distributions for shareholders, amid record quarterly revenue and soaring profit.
The US-listed owner and operator of VLGCs announced an “irregular” cash dividend of $1 per share, alongside reporting a threefold increase of net income to $51.3m for the three months ended 31 December.
This is Dorian LPG’s highest profit in seven years and is up from $16.6m in the same period of 2021.
Its latest payout brings total dividends declared over the past 12 months to $5.50 per share.
Its cumulative cash returns have amounted to more than $535m since Dorian LPG listed in New York nine years ago, chief executive John Hadjipateras said.
According to the company’s latest annual report for 2022, major Dorian LPG shareholders include Wellington Management Group, BlackRock, Kensico Capital Management, Dimensional Fund Advisors LP and Hadjipateras himself.
“We were pleased to deliver results for the quarter led by strong TCE [time charter equivalent earnings],” Hadjipateras said in the earnings release on 1 February.
“We remain positive on our core business.”
Analysts had recently estimated that further one-off cash distributions, of which the company has made use in the recent past, were on the cards.
These were made possible by Dorian LPG’s modern fleet and a cash position, which stood at $140m at the end of September 2022 and shrank somewhat to $130m three months later.
Hadjipateras’ optimism is underpinned by a robust market for the transport of LPG.
Dorian LPG’s average daily TCE earnings soared to $52,768 per day in the reporting period, up 58% year-on-year. According to TradeWinds data, this is again the highest reading provided by the company in 25 quarters.
As a result, quarterly revenue jumped to $103.3m — the highest quarterly figure on record and up from $68.6m in the same quarter of 2021.
Rising delays in the Panama Canal, particularly in November, played a part in this.
“Such delays increased the use of other routes to Asia such as via the Cape of Good Hope and the Suez Canal,” Dorian said.
Hadjipateras expects the company to be able to unlock “additional earnings capacity” going forward, as it expects to grow its fleet by four additional VLGCs this calendar year and to install scrubbers on another three — bringing the total number of its scrubber-installed ships to 16.
Dorian LPG currently owns 19 VLGCs built between 2014 and 2016 and another, older one, built in 2007. The company furthermore operates a pair of chartered-in VLGCs, the 80,800-cbm Future Diamond (built 2020) and the 77,400-cbm Astomos Venus (built 2016).
The Future Diamond will remain in its fleet for quite some time, as Dorian LPG announced on Wednesday it exercised an option to extend its charter-in deal to the first quarter of 2025.
Two of its own ships, the 84,000-cbm Corsair (built 2014) and the 84,000-cbm Concorde (built 2015), saw their charters extended as well to 2024.
As regards to decarbonisation, Hadjipateras said his company was “closely” monitoring evolving technologies, opportunities in its business, as well as “potentially attractive investments in related areas”.
He didn’t elaborate.
Last month, Dorian LPG announced boosting its decarbonisation efforts by becoming a partner of Denmark’s Maersk Mc-Kinney Moller Center for Zero-Carbon Shipping.
