Good morning, and welcome to the Dorian LPG Third Quarter 2024 Earnings Conference Call. [Operator Instructions]. 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 like to now turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.

Thank you, Rob. Good morning, and thank you all for joining us for our third quarter 2024 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 February 8, 2024. 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 December 31, 2023, that were filed this morning on Form 10-Q. In addition, please refer to our filings on Form 10-K where you'll find risk factors that could cause actual results to differ materially from those forward-looking statements. Finally, please also refer to the investor highlight slides posted this morning on our website to which we will refer during the call. With that, I'll turn over the call to John Hadjipateras.

Thank you, and thank you for joining us. John Lycouris, Ted, Tim and me will discuss our third quarter financial 2024 results. As you will hear in more detail from Ted and the financial year-to-date, we earned a record average TCE, record spot TCE and record EBITDA. While maintaining a strong balance sheet and capital to invest in our segment, adding our decarbonization initiatives, we continue to return capital to our shareholders. Including our recently declared dollar per share dividend, we will have returned over $690 million to shareholders since our IPO. As one of the largest operators in our segment, we believe we are well positioned to continue our profitable performance in the LPG sector and beyond. More than 40 ships were absorbed into the fleet in 2023, a 12% addition, this was the largest number of ships delivered in a single year since the delivery in 2016 of 46 ships, which represented 23% of the then existing fleet. Of the 17 new buildings slated for delivery in 2024, 4 have already started trading. We view the market volatility of 2023 and particularly the big rate spikes as evidence of demand and supply being close to equilibrium. The recent near total elimination of waiting time for the canal, which is still draft restricted, is not sustainable. The Canal Authority is prioritizing containerships and LNG ships over LPG. There are 109 neo-Panamax containerships and 73 LPG ships slated for delivery this year. For these reasons as well as the power reduction resulting in slower speeds, which didn't happen last year, we are optimistic. On the HR side, we continue to invest in improving the quality of life of our display Ukrainian seafarers and their families. We recently introduced a simplified payment system through an e-wallet that enables them to receive their monthly allotments quickly and with less hassle. On the social front, we will enter our [indiscernible] [04:50] final program through the All Aboard Alliance, a global maritime forum sponsored initiative, which will enable accelerated data collection regarding diversity and increased opportunities for all genders at sea. We are evaluating compelling emission saving devices and low friction pains for our ships. During Q3, we paid at one of our dry actions with silicon paid and have signed new contracts for energy saving devices that will be retrofitted in the coming year. We also continue our real-time emission monitoring program and have enhanced the initiative by installing MAN's EcoTorque engine diagnostics tools on 20 of our own chips. We have expanded our performance team in Denmark by adding a mechanical engineer. We ordered a new building, VLGC, VLAC from Hanwa shipyard in Korea for delivery in 2026 and are investigating opportunities to upgrade some of our existing ships to carry ammonia. John Lycouris will speak further on this topic. Ted, you have the floor.

Thank you, John. My comments this morning will focus on our capital allocation decisions. At December 31, 2023, we reported $208.5 million of free cash, which represented a very solid increase from the $190 million is, of course, reported after the payment of the $40 million dividend that was declared and paid during the December quarter. As of January 31, we had an unrestricted cash balance of $215 million, which is net of the $23.8 million down payment made on our VLGC AC newbuilding during January 2024. We do not consolidate the P&L or balance sheet accounts of the Helios Pool, which has the effect of understating our reported cash. As of January 31, 2023, the pool held cash of $36.2 million, and since we have a roughly 86% economic interest in the pool, it equates to cash of approximately $31 million, which is not otherwise reported on our balance sheet. With a debt balance at quarter end of $623.8 million, our debt to total book capitalization set at 38.8% and net debt to total book capitalization to increase our revolving credit facility from $20 million to $50 million and to add a $100 million accordion line for vessel acquisitions to the facility. We are grateful for their support and for their endorsement of our stewardship of their capital. We've begun to evaluate various pre- and post-delivery costs and high level of financial flexibility. Looking forward, we expect our cash cost per day for the coming year in capital expenditures for dry docking and potentially rates for ammonia capability in our existing fleet, which John will discuss later. For the discussion of our third quarter results, you also may find it useful to refer to the investor highlight slides posted this morning on our website. I would also remind you…

Ladies and gentlemen, please stand by. We're experiencing technical difficulties, and our conference will begin momentarily. Thank you. [Technical Difficulty]

Thanks, Rob. Again, we're positive on the long-term prospects of our business, but we are mindful of the near-term headwinds. With that, I'll pass it over to Tim Hansen.

Yes. Good day, everyone, and thanks for dialing in. As always, the VLGC market created some interesting times for the participants. As a record-selling strength in December, contracted sharply with the market during January 2024. The quarter ending December 31 in '23, saw record-breaking high freight levels for VLGCs. The primary drivers of the firm freight market where the widening U.S. to Asia arbitrage several new restrictions applying to the Panama Canal and subsequent vessel routing decisions amidst the uncertainty about the Panama and the Swiss Canal transits. Turning first to the arbitrage. In North America, production of natural gas liquids continue to increase inventories to record levels. This was amidst an unseasonably warm start to the winter. The increased supply of LPG lowered the U.S. export prices offsetting some of the short-term concerns about Asia import demand as was also -- the latter has also experienced a warm winter. The effect of the drought in Panama has been widely discussed. The Panama can now introduce new restrictions on VLGC transit at the end of October. A severe reduction of water level necessitated a reduction in daily transits with the cost of booking transfers of VLGC becoming more expensive. By the first week of November, auctions for neo-Panamax Canal transits reached a peak of just under $4 million. And some operators faced the real possibility of not being able to secure a northbound transit. VLGCs were opting for alternative routes, some turning around Mid Pacific to avoid uncertainty of the Panama Canal and a few optioning to balance around South America, resulting in increased ton miles as well as impacting lead time for owners and charters in estimating arrival in the U.S. Gulf for loading. The scheduling impact was eventually priced into the freight levels and late currents were fixed…

Thank you very much, Tim. At Dorian LPG, we firmly believe that we should be part of and provide long-term solutions to the world's decarbonization objectives and goals. Our investment in scrubbers continues to derive strong returns. Our average daily net savings over the quarter on our scrubber vessels stood at about $3,000 per day, $3,000 per day or about $3.4 million for the quarter. Fuel differentials between high sulfur fuel oil and low sulfur fuel oil averaged about $202 in the last quarter of 2023. The pricing differential of the LPG has fuel versus fuel oil, low sulfur fuel oil, stood at about $183 per metric ton, which was helpful for dual fuel engine vessels when operating with LPG. We now have a total of 14 scrubber-fitted vessels and 1 chartered in vessels. And we plan to retrofit another vessel with a scrubber unit in the second quarter of 2024. The installations of energy saving devices and the silicon how coatings to our vessels have provided significant performance improvements in fuel savings, reduction of the fleet CO2 emissions and improved CII ratings. Besides our capital -- vessel Captain John NP, which was originally built as a VLGC -- VLAC, as now called, we are upgrading some of our vessels to carry ammonia as it is quite visible for a good portion of the world fleet to carry out such upgrades. The EU emissions trading system that came into effect in January 1, 2024, is applicable to all ships calling at EU ports. Shipping companies will surrender their gear 2024 EU allowances, latest by September 2025 and every year thereafter, and it will reflect the CO2 emissions while their vessels were trading in EU waters. In line with end user pays principle, the cost of complying with the EU ETS…

Thank you very much, John. We're happy to take questions from anyone who is curious to ask them please.

[Operator Instructions]. Our first question will be coming from the line of Omar Nokta with Jefferies.

Congrats, obviously, on a very strong and I guess, record quarter. And Ted, I just wanted to ask if you could repeat maybe the guidance figure you mentioned for the bookings to date. Did you say it was 100,000 for 60% of the quarter?

Yes, that's correct, Omar, in excess of 100,000 and in excess of 60% of the days.

And that includes the TCE.

That includes the pool TCEs.

Okay. All right. And then I just wanted to ask maybe -- and I know, Tim, you touched on this, but obviously, last year was a very, very strong year for VLGCs. You had a big jump in U.S. set sports. You had the Panama Canal, which really all that can offset the new buildings. And as you mentioned, the fleet was fully absorbed in. So far, things have corrected over the past few weeks and perhaps look to have maybe overshot to the downside and especially in relation to where I say the low point was at this time last year, what do you see is driving the pullback in rates? And when can we start to expect things to turn around?

Tim? Yes. You've asked Tim, so I'll let him. We have the same answer anyways. Yes, yes.

Yes. So I mean you're right, we're at a lower point now than the drop of last year, and we're kind of seeing these drop always in the first quarter at some point. But this year, it was very quick and dramatic but also coming from an exceptionally high point. So I will say the start was aligned in one direction and now they are in the other direction. I think that that what we see is both an overreaction. And as I mentioned in the end, I think we will see U.S. inventory still very, very high. So even with the cold winter would not create the same worries that you have seen before of the U.S. running out of gas. So I think the pricing will align again quickly as soon as the worst coal is over. And also, one of the other factors is the Panama Canal, which we see every year that after the festive season in the U.S., the number of transits decline and the transit especially for the container business, they are less busy passing in January and obviously to the Chinese holiday. So we see also that situation has a temporary blip, and we think that we will return to being congestions being the norm rather than the exception. And as John mentioned, more new buildings on LNG in container. So we see this coming, and we still see the transits are still way lower than it was last year. The number of transits available. And if you think that the new canal today only takes around 7 a day transit. So -- so if you add 100 and 170 some ships under almost 200 ships more for that I can use a canal next year and many of them that is a main trade route, and we see this -- these rejections coming back. So I think to your question, when is it -- when will we see a return, we think pretty soon within this quarter, we will see this aligned because I think it's been overshot on the downward side. So we do see these things correcting themselves what we're coming into the holidays in China soon. So that always put a little bit of a damp on the market. And also there are some cargos unsold in the water also Iranian tons that seems to be a problem to clear. So it could take a little while before we see the bounce back within this quarter, we do expect this to correct of.

Thanks, Tim. Thanks. I would just add that we can never really tell which quarter it's going to happen. We can give you what we think is guidance were an average for the rest of the year or whatever. But hopefully, the market will react. And the question is, when it bounces, how well it bounces. So as I said, I think, before, when the market starts falling, they kind of forget where to stop. So I think we're going to hit more quickly and then bounce back, but.

Yes. No, that's very helpful. And that makes sense, John, you just said and obviously, Tim, very good color. I appreciate you kind of going into detail there. And then just a couple more for me and I'll turn it over. Maybe just first -- sort of next question is just on the Red Sea. Clearly, it's been very, very topical and front and center really over the past few weeks. How would you size up the impact of what's going on in the Red Sea with the diversions. How do you size what that impact on the VLGC trade stay in comparison to what we've been seeing or had seen in the Panama Canal last year.

It's not so obvious, Omar, because the trade through the canal -- through the Suez Canal was almost kind of caused by the congestion of who -- in Panama. Also, the -- so the Suez Canal now itself, I'm not sure. The Red Sea trade had -- the main VLGC trade out of the Red Sea is out of Jordan and in Jordan -- Sorry, not out of Jordan, out of Saudi Arabia, Yanbu. And Jordan has absorbed some of the cargoes that would otherwise have gone East from Yanbu. And that has displaced some cargoes that would have come from the state. So that is a negative on the ton mile. On the other hand, Saudi could divert the loading of the cargo from Jordan to Rastadora, which probably won't happen. So that total number of ships coming out of the Red Sea was, I think, 4 to 5 a month out of Yanbu, representing about 30% of the exports from Saudi Arabia. So it's not -- it's -- because we're in a flux, so I don't think it's easy to kind of predict what the eventual impact of the hostilities in that region will be -- to tell you that I don't know.

I appreciate you attempting to -- or at least summarizing all that, that's helpful context as well. And then maybe just a final one for me. Just on the newbuilding and just kind of thinking about John Lycouris comments about outfitting the existing fleet to carry ammonia. I guess just one question on that would be what does the cost look like to upgrade for ammonia? And then also in terms of the new building, is there a price difference in ordering a VLAC versus a VLGC? And maybe just, I guess, multiple questions, but what's the difference between the VLAC and the VLGC, I guess, going forward?

Yes, Omar, it is a cost that over a number of ships is going to be quite low. But we are -- we have been looking into this for some years now. And we think that it is significantly less than $5 million and probably even lower than that when it is amortized over a number of ships. So it is something that is, let's say, it takes time, but it is not a significant cost to carry out those conversions.

Omar, we're mindful of that because it -- as it applies to our -- not all our ships, but some of our ships, it also applies to a good number of the world fleet. So people -- we sort of get too carried away with new building dedicated ammonia carriers on a good part of the fleet, the existing fleet of VLGCs could be -- may be less efficient than a new ship, but they could still carry ammonia with some modifications and upgrades.

Understood.

Our Next question is from the line of Øystein Vaagen with Fearnley Securities. Øystein Vaagen : Just a quick question for me. As you just discussed, your rates have been quite high over the last couple of months in this winter establishing the high. But you booked $91,000 roughly on the spot and pool for the fourth quarter. But again, that's not really at the highest as we saw spot rates go to $114,000. Now you're talking about the $100,000, which I guess makes sense as ship owners take some coverage on the way up. But my question is now spot rate in its now below cash breakeven levels and close to OpEx. What kind of levels are you fixing at today? Does it work differently on the way down as well?

Well, I'd say a couple of things. First of all, just to be clear, the results that we mentioned going forward, there is a measure of time charter ships in there which are lower. The spot market rates that are booked in that forward number they're very attractive. And as for current fixing, look, that's pretty commercially sensitive information. We have a general matter don't really comment on it. But Tim was to give a little bit more he may, but I'd say in general, when we've thought when he described his strategy to us, look, our guys have been proving to be pretty good at figuring out when cargoes are going to be available and how many ships are going to be able to meet the lake in and kind of flexing our planning around that. Tim, if you want to add anything to that, feel free or not.

Yes, you can say that the drop was pretty quick. So only things that has been fixed was kind of like what was in the front. So I should say, you take a couple of the way down, but actually, we had fixed pretty far forward already. So we didn't have much to fix in the fixing window when market drops. So -- so most of our positions comes only available more than a month ahead from now. So as the market has been dropping, then people doesn't fix that far ahead. So we're not really that much of the fixing window yet. So we'll see if it turns around before we get there. But yes. Øystein Vaagen : And just to add on, you fixing window now in the market in general? Is that early March now? Or where are we now?

We may not – sorry, but we don’t want to go too much into the market. A –Ted Young: It’s commercially sensitive. A –John Hadjipateras: Yes.

We've reached the end of the question-and-answer session. I will now turn the call over to John Hadjipateras for closing remarks.

Thank you, Rob. Thank you for your questions -- valued questioners, and have a good quarter, have a good February and see you next time.

This will conclude today's conference. You may now disconnect your lines at this time, and have a wonderful day.