John Hadjipateras - Chairman, President, Chief Executive Officer, Dorian Ltd. John Lycouris - Chief Executive Officer, Dorian LPG (USA) Tim Hansen - Chief Commercial Officer Ted Young - Chief Financial Officer

Greetings! And welcome to the Dorian LPG, First Quarter 2023 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 Dorian 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, Joe, and good morning everyone. Thank you all for joining us for our first quarter 2023 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 August 10, 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 June 30, 2022 that were filed this morning on Form 10-Q. In addition, please refer to our previous filings on Forms 10-K where you'll find Risk Factors that could cause actual results to differ materially from those forward-looking statements. With that, I'll turn the call over to John Hadjipateras.

Thanks Ted and thank you for joining John, Ted, Tim and me to discuss our first quarter financial year 2023 results. The war in Ukraine has had a complexity to our crew operation, and our crew departments work diligently and quickly to insure safety and welling being of many of our Ukrainian seafarers. The COVID pandemic and recent port closures in China have continued to create challenges around crew changes, but through close interdepartmental coordination we have managed these challenges well and without creating major deviations or delays. Global LPG exports increased 2.6 million tons or about 5% of the first six months of this year compared to the same period last year with the Middle East as the main contributor to global export growth, up 13% year-on-year. Estimates for U.S. exports point to further growth in 2022 and 2023 and this July short-term energy outlook report that EIA estimated that U.S. LPG exports will grow in 2022 and expects the trend to continue with exports increasing in ‘23, driven by continued production growth and flat domestic demand. Tim will give you more details on the supply growth and our view of the market. We are leveraging our in-house expertise to optimize our fleet’s technical and commercial performance. Our bunkering management and the chartering operations departments are making considerable impact on sourcing best quality and best price bunkers for our fleet and our pool fleet. The price spread between heavy fuel oil and low-sulfur fuel oil currently at about $300 per ton is providing a good return on our investment in scrubbers. The 2023 IMO emission regulations are coming up quickly and our technical and fleet performance teams have been actively assessing and ordering retrofit equipment which will reduce our consumptions and emissions footprints. Through the diligent assessment of hardware and software retrofits on our ships, we will be able to meet IMO targets and continue to harness the superior earnings potential of our modern fleet. John will give you much more information on this shortly. Considering the age profile of our fleet, our dual fuel new building, the time charter of three duel fuel new ships and the additional flexibility following the refinancing of our term facility which we announced today, we are well positioned to pursue an optimal capital allocation strategy. Our declaration of a $1 per share dividend supports this view and demonstrates our continued commitment to shareholders, which is possible because of our focus on serving our charter as well and ensuring the wellbeing of our seafarers and shore side staff, to whom we are grateful. I will now pass the line over to Ted for more on this and our financial results.

Thanks John. My comments today will focus on the recent capital allocation events, our financial position, liquidity, as well as our unaudited first quarter results. You may wish to refer to the investor highlights materials posted this morning on our website. At June 30, 2022 we reported $155.5 million of free cash. During the quarter ended June 30, we voluntarily prepaid $25 million of debt under our 2015 AR Facility, and refinanced the Cougar, which generated about $30 million in net proceeds. We of course also paid out roughly $100 million in dividends. As John also just mentioned, we will pay another $1 per share as an irregular dividend or roughly $40 million in total in dividends on or about September 2 to shareholders of record as of August 15. Since the quarter ended, we concluded a new $260 million loan agreement that will refinance debt related to our 2015 AR Facility, the Corvette and the Concorde, the Concorde actually won't happen until September 6. In total, debt across the eight vessels in the facility today and the Concord and the Corvette was about $242 million and the new facility will begin with $240 million of term debt drawn, so it is a leverage neutral transaction for us. We are extremely pleased to be working with Credit Agricole, ING and SCB again, and to welcome BNP Paribas and DSF, that's Danish Ship Finance to our loan facility. We have summarized key terms of the new facility in the investor highlights materials posted this morning. A few highlights though: The facility is seven years in duration, carries an interest rate of SOFR plus 220 and has a 20 year age adjusted profile which translates into $5 million of quarterly amortization. We will also have an undrawn $20 million revolver at close.…

Thank you, Ted, and good day everyone. Thanks for dialing in. The second quarter of 2022 saw increased LPG export and import demand. The global seaborne LPG transport for the second quarter was almost 2 million tons above the levels that we told in the first quarter. North American export continued 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 second quarter was the highest second quarter on record, indicating that the open plus production charter vessels have indeed have a positive impact on the LPG transport. Freight levels for both BLPG1 and BLPG3 which are the indexes for the east and west market respectively were higher than in Q1, and even with bunker prices fluctuating and growing somewhat up, earnings still increased versus previous quarter. These consumers markets saw the BLPG1, the benchmark of [inaudible] carrying the freight momentum from March into April, primarily due to a firm west market that have shown interest in capacity. Through May there was a period of inactivity due to the Golden Week holidays, but by the end of May a sudden burst of activity from the Middle East, but as usual charted the vessel supply demand balance and the BLPG1 jumped above the $100 per metric tons for the first time since January ‘21. The rapid rise in the freight index was quickly followed by downward corrections in June, bringing the numbers more in line with what was seen in April. For the Western Suez market, April likewise carried on the momentum from the previous quarter. As was also the case in the East, May was the most active month. The beginning of the months were somewhat negatively impacted…

Thank you, Tim. In the last quarter the concerns of a global economic recession outweighed the supply chain concerns over the previous quarter and caused oil markets to retreat from their highs. It is interesting to note that the global very low sulfur fuel oil prices did not follow the oil market's move to lower levels. Refiners have been struggling to replace Russian exports of middle distance products, causing them to outpace brand crude prices, as has the very low sulfur fuel oil which requires blending of dissonance to produce. According to shipandbunker.com, very low sulfur fuel oil has significantly outstripped global crude oil markets, hitting a record high on July 5 of $314 per metric ton or 141% of the Brent crude price. Taking the average of the major bunkering hubs, very low sulfur fuel oil currently stands at 110% of Brent crude price. A more significant development for Dorian LPG has been the average bunker fuel spread of the heavy fuel oil to the very low sulfur fuel oil, which reached almost $400 per metric ton during July. For the second quarter of 2022 our average savings were about $270 per metric ton for heavy fuel oil supplied to our vessels against the very low sulfur fuel oil prices. Our original expectations continue to be validated, not only with our selection of hybrid multi-loop scrubbers as opposed to open signal-loops, but also with our investment pay back estimates having paid back more than 73% of the equipment capital expenditure and all the installation costs. As we move closer to 2023, we continue the plan to retrofit various energy saving devices to run our fleet, which in conjunction with engine power limitation when applied will improve the fuel efficiency, reduce emissions and render the fleet capable to exceed the…

Thank you, John, and we're ready to open for questions. If anyone has something to ask, we're here.

Thank you. [Operator Instructions] The first question comes from Omar Nokta with Jeffries. Please go ahead.

Thank you. Hey guys! Good morning! I wanted to ask about the capital allocation. You know you guys definitely over the past two years have really ramped up the shareholder rewards with the buy backs, the tender offer, the special dividend and the irregular dividend. I did want to ask you know, we're starting to see these irregular dividends becoming more frequent and just wanted to ask, what are your thoughts on dropping that monitor irregular and going with regular in the future?

Thanks for the question Omar. It's something I’ll let Ted answer it and give you a – because we've been discussing that. But we're coming from a point of view that I think at the moment we're happy with where we stand, with how we described it and I think our shareholders are happy to receive what they've been receiving. But I saw – before I let you go on to Ted, I want to congratulate you on your new position and good luck! We're looking forward to working with you.

Thank you very much there.

So Omar, yes, it's a fair question. I think the alternative would be some sort of a formula, and we kind of struggle, because it's not a great match between income statement accounting and shipping and cash flow necessarily. So for example, you know a common metric has been EPS for people to pay out. So you know if you look at, if you look at this quarter right, you know we reported $0.62 of net income. We paid out 133% or something. That's not a customary ratio and while I know people like to be able to expect something, you know we've been given the volatility that we've seen in shipping. We think kind of our approach of [audio gap] make the most sense, because while we're obviously focused on doing right by shareholders, one of the ways we think we can best do it is by focusing on total shareholder return. Trying to manage for stock price or yield is going to be awfully tough in this sector, whereas you know as we pay dividend that does improve our total shareholder return, which we think shareholders care about.

Thanks Ted. No, I appreciate that. It's just good to kind of hear that your perspective definitely feels maybe more and more with each passing quarter. I'm not sure if its conviction I guess, that's the right word, but it definitely feels you guys are more confident than how your positioned, especially with – you know recently as you refinanced your debt. I did maybe want to ask a bit more of a bigger picture, kind of looking at the company and the business. You know it looks like cargo flow here has been pretty plentiful in recent months as you guys outlined and it looks like that's going to continue from OPEC and from the U.S. We do also have a sizeable order book as we look into next year. How do you think about Dorian's positioning in the market as we move ahead here, over the next say 18 months?

Tim, do you want to give our perspective on that?

Yes, so as you rightly said, there’s a lot of new buildings coming into the market. I think we have by shoulder, a few of the older ships. You know also as John mentioned have one new building and three long term time charters coming. So I think we kind of keyed our position in the market size wise, even though the market has grown, and we also see that this supply that we expect from the U.S. which have been much more positive than previous forecasted and the ramp up of the middle east supplies, it’s going to be enough to support the market and keep the market going even with a number of new buildings coming in. That is being held and also I think we mentioned in the last quarter also by the new regulations in ‘23 with the – where we expect somewhat of a slowdown of the royalty and also we are still seeing a lot of delays in Panama and so on. So we think all-in-all these, you can say inefficiencies in the market will build and the huge production and an increase of products will be enough to [inaudible] and take us safe through the next couple of years and then its starts looking better again.

Very good. Well, thank you for that, and John thanks again and thanks for your comments. I'll turn it over.

[Operator Instructions] This concludes the question-and-answer session. I’d like to turn the conference back over to the Chairman and CEO for any closing remarks.

Thanks a lot, and wishing you all a good August and look forward to seeing you and hearing you at the next quarter call. Thank you very much.

This concludes today's conference call. You may disconnect your lines. Thank you for participating and have a pleasant day!