Dorian LPG's $62M Bet as VLGC Market Hits Record LPG Trade

Date of Call: Feb 5, 2026

Guidance:

• Cash cost per day for the coming year expected to be approximately $27,000 per day, excluding capital expenditures for dry docking and scrubbers.
• Expect to take delivery of a new-building ammonia-capable VLGC at the end of March 2026 and pay about $62 million in cash at closing, financing the payment via a loan facility.
• For the March quarter, TCI expense estimated to continue in the $18 million to $19 million range.

Business Commentary:

Strong VLGC Market and Dividend Payments:

• Dorian LPG reported a TCE per available day of $50,333 for the third quarter, with spot earnings well above long-term mid-cycle.
• The company declared a dividend of $0.70 per share, totaling $29.9 million, marking the 18th dividend payment since its IPO.
• The robust VLGC market and strong freight rates supported the company's ability to maintain and increase dividend payments.

Operational Enhancements and Cost Savings:

• The company completed 12 dry dockings in the past year and fitted most ships with energy-saving devices and silicone paint, resulting in meaningful cost savings and emission reductions.
• Operational expenditures, excluding dry docking, were $9,558 per day, showing stability over the last two quarters.
• The implementation of energy-saving measures contributed to lower operational costs and improved efficiency.

Record LPG Trade and Market Challenges:

• Global seaborne LPG trade reached a new quarterly record of over 37 million tons, with North American exports contributing significantly.
• The market faced challenges due to lower-than-anticipated Saudi contract prices and retaliatory port service fees in China.
• Despite these challenges, the fundamental attractiveness of LPG and market agility supported a positive outlook for 2026.

Sentiment Analysis:

Overall Tone: Positive

• "The VLGC market remained strong in the fourth calendar quarter with spot earnings well above long-term mid-cycle despite some volatility. Indeed, as we speak, demand and freight rates continue to be strong." "We are encouraged by the lower OpEx, excluding dry docking over the last 2 quarters." "We feel well capitalized for fleet growth and renewal or for whatever challenges might arise."

Q&A:

• Question from Omar Nokta (Clarksons Securities): What's been driving the counter-seasonal strength in the spot market, and what does that mean for the year?
  Response: The strength is due to a backlog of unfixed vessels clearing up after market uncertainties (e.g., Saudi CP pricing, U.S.-China port fees) in November, plus strong production levels. The outlook for 2026 is positive.

• Question from Omar Nokta (Clarksons Securities): Can you share details on a specific time-charter deal (e.g., Chaparral) and how it compares to spot rates?
  Response: Management declined to give specific rates, citing a P&C clause, but noted the deal was done in October/November for a little over a year and is at levels comparable to recent spot earnings.

• Question from Omar Nokta (Clarksons Securities): How will you fund the $62 million remaining payment for the new-building?
  Response: Management plans to finance the rest of the payment, with more detail forthcoming later.

• Question from Climent Molins (Value Investor's Edge): To what extent can the VLGC fleet speed up if rates remain solid?
  Response: Some leeway exists (about 1-2 knots) mainly for non-ECO ships, but most ECO vessels are capped by environmental regulations. Speeding up is limited by weather and operational realities.

• Question from Climent Molins (Value Investor's Edge): What improvements have energy-saving devices resulted, and what IRR do they generate?
  Response: Devices like silicone paint and energy-saving equipment typically provide around 5% improvement in efficiency with a payback period generally within a year.

Contradiction Point 1

Primary Cause of VLGC Spot Market Strength

Conflicting explanations for the recent surge in VLGC charter rates.

What is driving the counter-seasonal strength in the VLGC spot market (rates at 2+ year highs), and what does this mean for the year's outlook? - Omar Nokta (Clarksons Securities)

2026Q3: The strong start to Q1 is partly a spur from... lack of activity in November as uncertainties... cleared up. Production levels have kept on increasing and surprising to the upside... - [Tim Hansen](CCO)

What's driving the recent spot rate increase amid approaching seasonal weakness? - Omar Nokta (Jefferies LLC, Research Division)

2026Q2: The recent rate increase is attributed to a "wait-and-see" stance before the U.S.-China meeting, leading to a temporary hold on fixing activity... - [Tim Hansen](CCO)

Contradiction Point 2

Guidance on Future Fleet Deployment & Earnings

Inconsistency in providing specific forward earnings guidance.

Can you provide details on the fleet deployment, specifically the Chaparral's time-charter contract extending through 2027 and its rate compared to others? - Omar Nokta (Clarksons Securities)

2026Q3: The company will not provide specific forward booking guidance until later in the quarter due to volatility. - [Tim Hansen](CCO) & [Theodore Young](CFO)

Why was the final rate (53,000-54,000) lower than expected despite firm VLGC spot rates? Was it due to accounting treatment or dry docks? - Omar Nokta (Jefferies LLC, Research Division)

2026Q2: With the dry docking program largely complete, future guidance should be more accurate. The estimated TCE for the upcoming quarter is around $57,000 per day. - [John Hadjipateras](CEO) and [Theodore Young](CFO)

Contradiction Point 3

Primary Drivers of VLGC Market Strength

Different primary factors cited for the same market phenomenon.

What is driving the unexpected strength in the VLGC spot market (rates at 2-year highs) and its impact on the annual outlook? - Omar Nokta (Clarksons Securities)

2026Q3: The strong start to Q1 is partly a spur from... lack of activity in November as uncertainties cleared up. Production levels have kept on increasing and surprising to the upside, supporting strong cargo availability. - [Tim Hansen](CCO)

What factors have driven the VLGC market's growth this year, especially with rising spot rates? - Omar Mostafa Nokta (Jefferies LLC)

2026Q1: The primary driver is the strength of U.S. NGL production and export growth. The market's resilience is also attributed to the industry's ability to adapt to trade barriers... Additionally, Red Sea transit difficulties have lengthened ton miles, supporting freight rates. - [Taro Rasmussen](Corporate Participant)

Contradiction Point 4

Outlook for 2026

Contradiction in the tone and certainty of the forward outlook.

What is driving the counter-seasonal strength in the VLGC spot market, with rates at 2+ year highs, and what does this mean for the year's outlook? - Omar Nokta (Clarksons Securities)

2026Q3: The outlook for 2026 is pretty positive. - [Tim Hansen](CCO)

Why have freight rates taken a larger share of U.S. export arbitrage than last year? - Omar Mostafa Nokta (Jefferies LLC)

2026Q1: This year's dynamics are more influenced by geopolitical events (tariffs, Middle East tensions). A key change is that terminalling fees were significantly lower year-over-year due to ongoing expansion of U.S. terminal capacity, which has absorbed more of the arbitrage value. - [Theodore B. Young](CFO)

Contradiction Point 5

U.S.-China Trade Pattern and Tariff Impact

Contradiction on the current status of U.S. LPG exports to China and the resulting trade route stability.

What is driving the counterseasonal strength in the VLGC spot market, and how does this impact the annual outlook? - Omar Nokta (Clarksons Securities)

2026Q3: Production levels have kept on increasing... supporting strong cargo availability. The outlook for 2026 is pretty positive. - [Tim Hansen](CCO)

With the recent U.S.-China trade deal, have you seen increased orders or inquiries from Chinese buyers, or are new trade routes becoming saturated? - Omar Nokta (Jefferies)

2025Q4: No U.S. cargoes are currently flowing into China due to the 10% import tax... Trade has stabilized on alternative routes, supporting freight rates. - [Tim Hansen](CCO)