Greetings, and welcome to the Dorian LPG Fourth Quarter and Full-Year 2022 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 of today's conference call is available on the Dorian’s LPG's website, which is www.dorianlpg.com. I would now like to turn this conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.

Thank you, Lora. Good morning everyone and thank you all for joining us for our fourth quarter and full-year 2022 results conference call. With me today 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 June 2nd, 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 March 31, 2022, that were filed this morning on Form 8-K. In addition, please refer to our previous filings on Forms 10-K and 10-Q where you'll find Risk Factors that could cause actual results to differ materially from those forward-looking statements. Please note that we expect to file our full 10-K for the 2022 fiscal year in the near future. Finally, for your reference during our formal remarks, please refer to the earnings supplement that we posted this morning on our website. With that, I'll turn the call over to John Hadjipateras.

Thanks, Ted. Good morning and thank you for joining John, Ted, Tim and me to discuss our fourth quarter financial year 2022 results. The Baltic VLGC index averaged about $57 per ton for the period January through March. As of yesterday, rates had improved to $94.8 per ton. Global exports increased 1.7 million tons in the first four months of this year, compared to the same period last year, or about 5% with the Middle East, the main contributor to global export growth, up 13% year-on-year. Tim will give you more details. The price spread between heavy fuel oil and low sulfur fuel oil is currently around $230 per ton, providing a good return on our investment in scrubbers, as John will illustrate shortly. Our new bunkering manager with the chartering operations departments are making considerable impact on sourcing best quality and best price bunkers for our fleet and our pool fleet. And it’s May short-term energy outlook report, the EIA estimated that U.S. LPG exports will grow 6% in 2022. It expects the trend to continue with exports increasing 15% in 2023, driven by continued production growth and lower domestic demand. Our outlook for the next quarter and the remainder of the year remains sanguine. In recent weeks, Panama Canal congestion has increased weighting days, which is good for overall fleet utilization. There are only two new building VLGCs scheduled for delivery between now and the end of June, three in the third quarter and seven in the fourth. We are faced with new challenges resulting from the invasion of Ukraine in addition to the continuing and significant disruptions due to COVID. Our crewing operations, HSEQ and other departments have worked comprehensively to facilitate crew changes to ensure that our seafarers are working well together and that their families…

Thanks, John. My comments this morning will focus on the recent capital allocation events, our financial position, liquidity and our unaudited fourth quarter results. Fourth quarter was very busy from a financing perspective. We completed four refinancings during the quarter for the Copernicus, Cratis, Caravelle and Chaparral, and one financing subsequent to year-end for the Cougar. Four of these transactions have purchase obligations, while the Chaparral financing has only a purchase option. In addition to attractive terms in advance rates, we really like the longer tenders and profiles that are available to us in this market with the tenders for these deals ranging from seven to 10 years. At March 31, 2022, we reported $236.8 million of free cash, which is roughly where our cash balance sits today. Since March 31, we prepaid $25 million of debt under our 2015 AR Facility and refinanced the Cougar, which generated about $30 million in net proceeds. We will be paying out roughly $100 million of cash next week for the dividend that we announced in early May. Pro forma for these transactions, March 31 cash would have been $141.7 million, which is a comfortable level for us. With the debt balance at quarter-end of $670 million, our debt to total book capitalization stood at 42.1% and our net debt to net total capitalization at 32%. We have no refinancings until 2025, ample free cash and undrawn revolver and one debt-free vessel, plus we have a significant measure of financial flexibility. For the coming year, we expect our operating cash cost per day, that's OpEx, G&A, interest in principal to be approximately $23,000 per day, excluding the outlay that we made in May for our new building. For the discussion of our fourth quarter results, you may also find it useful to refer…

Thank you, Ted, and good day everyone. Thanks for dialing in. The first quarter of 2022 demonstrated that VLGC fundamentals remained healthy. LPG production worldwide increased and as the Asian import demand. This happened amid -- and despite volatility brought on by an excessive period of commercial inactivity in China and the Russian Federation's invasions of Ukraine. Global seaborne LPG Transport for the first quarter was the highest on record in the first quarter, up about 400,000 metric tons, compared to the previous record in 2020. North American exports continue to increase on the back of record-setting production levels. Middle East export volumes also showed growth, particularly from the United Arab Emirates, Qatar, and Saudi Arabia. The export volumes for the first quarter are the highest since 2019. This indicates that the OPEC+ production cut reversals have indeed had a positive impact on the LPG Transport. Demand for VLGC shipping during the first quarter followed the trends of previous first quarters, namely the January's demand is high; February is low; and March is a period of recovery. The BLPG1 index indicating the market freight for the Middle East to Asia averaged about $57 per metric ton during the first quarter. This equals a time charter return of about $31,400 per day on an ECO-type non-scrubber vessel excluding idle time. This compared to $59 per metric tons or about $40,500 per day TCE on a similar vessel during the fourth quarter of 2021. The BLPG3 index indicating the freight from U.S. Gulf to Asia averaged about $100.5 metric tons -- per metric tons during the first quarter. This equals to a time charter return of about $36,700 per day, again on ECO-type scrubber ship. This excludes idling time and also excluding Panama Canal waiting time in ballast. This compared to about…

Thank you, Tim. Last quarter's geopolitical events of war in the Ukraine, the Russian oil embargo and position of economic sanctions and increased risk of recession to the world economies have caused volatility in the world financial markets, which have resulted in a significant increase in crude oil and gas prices, due to supply dislocations and anticipated fuel shortages for most of the European countries. Since our last earnings call in early February, fuel prices have jumped more than 25% currently, having reached well over 30% at the end of the first quarter. The average spread differentials for bunker supply at the ports of Singapore, Rotterdam, Houston and Fujairah for low-sulfur fuel oil and high-sulfur fuel oil have progressively widened during that time from about $150 a ton to about $200 per metric ton at the end of the quarter and to about $230 currently. The low-sulfur marine gas oil 0.1% sulfur prices stand 42% higher since our last call, indicating shortage in the markets for this kind of product. For a vessel consuming 40 metric tons a day at sea, the fuel differential for the scrubber vessels can translate to roughly $8,000 per selling day. These economics are maximized on long-haul voyages, because vessels need not burn more expensive low-sulfur fuel oil or marine -- low-sulfur marine gas oil fuels at sea or in emission-controlled areas or during port stays when loading or discharging. We are pleased to note that our original expectations continue to be validated not only with our selection of the hybrid multi-loop scrubbers as opposed to open single loops, but also with our investment payback estimates having paid back more than 60% of equipment capital expenditure installation costs. We are retrofitting various energy-saving devices to improve the performance and reduce the engine power requirements for…

Thank you, John. We're happy to take questions. Lora, do you want to see if there are any questions for us, please?

With the prepared remarks completed, we will now open the line for questions. [Operator Instructions] Our first question comes from the line of Brian Reynolds with UBS. You may proceed with your question.

Hi, good morning, everyone. Just curious if you can talk about just the Russian invasion of Ukraine and how it impacts the global flow of LPG? We've seen some upward revisions in the U.S. LPG export expectations and expansion announcements recently. And curious if you can talk about how much of that is due -- is just due to displacement of Russian LPG and the demand for it versus just natural organic growth that may have not been baked in before?

I'll let Tim answer that. But I can tell you, for example, that we have had -- we've performed the voyage from the U.S. Gulf to actually from Marcus Hook to Finland, which is something that we've never done before. So that was an indirect result of the conflict, I believe. But Tim can give you more details.

Yes. I think as I mentioned before, also we did see increased activity into Europe. And we've looked at various analysis of what they come to -- of the consumption in especially Poland and Ukraine, which is using LPG for car fuel. And overall, we see a demand for around four VLGC cargos a month into Europe in addition to what is normally -- has been going in there to cover this demand. And this is all kind of new demand in the way that it is previously come in on rails and trucks from Russia, so we just shifted into seaborne demand. In addition to that, as I mentioned, in naphtha-prices have been high. And as you've seen on the fuel prices, especially on the spread from heavy fuel to low-sulfur fuel oil, there's a lack of clean fuels, which have caused naphtha also to be very expensive and LPG shifting into that space for the crackers in Europe. Also, we have seen some LPG actually being reinjected into the LNG stream in Europe, due to the high LNG prices and lack of demand from LNG. So we estimate it sort of roughly to four to five VLGCs per month on a regular basis of that demand.

Great. That's super helpful. Thank you for the color. And then maybe as my one follow-up, just curious if you could talk a little bit more about the future propulsion technology. I think you talked about how scrubbers ended up improving your payback period and pulling that forward. But wondering looking forward is there any more consideration of dual-fuel technology or anything else, just given -- and then maybe just talk a little bit about the bunkering market just given that we're seeing low inventories across the refined products market globally. Thanks.

Yes. Tim will answer you on the question on the bunkering market, and then John will give you a bit of background on your -- the rest of your question. But on the question of dual-fuel, we've kept this open all the while because the economics are changing all the time. And so far, we're happy with what we've done scrubber-wise. And we feel that we -- having the optionality and not having done dual-fuel to-date, where -- it's a positive, but we still have the optionality for that. And as you know, we opted for dual-fuel on our new building, as well as the three ships that we -- new buildings that we chartered in. But yes, Tim will tell you about the bunker market, and then John will tell you a little bit about efficiency and all that stuff.

Yes. On the bunker side, as John Lycouris also mentioned that the spread has widened and as I mentioned, there's a shortage of clean products, I think at the moment in Singapore. We see a spread of around 340 or something between low-sulfur and heavy-sulfur fuel oil. And we are seeing the supply difficulties around the world, and we see that continuing for a considerable time as long as the war in Ukraine has effect, which it might prolong after the war hopefully ends. And then I think with the high oil prices, which we will likely see going forward and these spreads will remain on heavy fuel and low-sulfur fuel. We have seen lately LPG prices coming off and coming back into the space where it becomes economical to use LPG fuel as well. All while it's still less advantageous than burning heavy fuel at the moment, it has definitely increased its competitiveness over the last couple of months.

Great. Appreciate all the colors, guys. Thanks.

[Operator Instructions] Ladies and gentlemen, that's the end of today's question-and-answer session. I would like to turn this call back over to Mr. John Hadjipateras for closing remarks.

Terrific. Thank you, Lora, and thank you, everybody, for dialing in and for questions and hope you have a good summer. We'll talk to you next quarter again. Thank you. Bye-bye.

This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and enjoy the rest of your day.