Dorian LPG Ltd. (LPG) Bundle
Understanding Dorian LPG Ltd. (LPG) Revenue Streams
Understanding Dorian LPG Ltd.’s Revenue Streams
For the six months ended September 30, 2024, total revenues were $196.8 million, a decrease of $59.5 million, or 23.2%, compared to $256.3 million for the same period in 2023. This decline was primarily driven by reduced average Time Charter Equivalent (TCE) rates, which fell from $56,597 per available day to $43,705 per available day.
Revenue Breakdown by Source
The revenue composition for the six months ended September 30, 2024, is as follows:
| Revenue Source | 2024 (in $) | 2023 (in $) | Change ($) | Change (%) |
|---|---|---|---|---|
| Net pool revenues—related party | $189,284,698 | $242,237,953 | ($52,953,255) | (21.9%) |
| Time charter revenues | $5,847,340 | $12,899,240 | ($7,051,900) | (54.7%) |
| Other revenues, net | $1,654,484 | $1,124,176 | $530,308 | 47.2% |
| Total Revenues | $196,786,522 | $256,261,369 | ($59,474,847) | (23.2%) |
Year-over-Year Revenue Growth Rate
Comparing the six months ended September 30, 2024, to the same period in 2023:
- Net pool revenues decreased by $52.9 million, or 21.9%.
- Time charter revenues decreased by $7.1 million, or 54.7%.
- Other revenues increased by $0.5 million, or 47.2%.
Contribution of Different Business Segments to Overall Revenue
For the three months ended September 30, 2024, total revenues were $82.4 million, a decrease of $62.3 million, or 43.0%, from $144.7 million in the same quarter of 2023. The breakdown is as follows:
| Revenue Source | 2024 (in $) | 2023 (in $) | Change ($) | Change (%) |
|---|---|---|---|---|
| Net pool revenues—related party | $79,877,644 | $137,851,402 | ($57,973,758) | (42.1%) |
| Time charter revenues | $2,432,989 | $6,475,768 | ($4,042,779) | (62.4%) |
| Other revenues, net | $122,847 | $371,292 | ($248,445) | (66.9%) |
| Total Revenues | $82,433,480 | $144,698,462 | ($62,264,982) | (43.0%) |
Significant Changes in Revenue Streams
The significant changes in revenue streams from the previous year are linked to the decline in TCE rates, primarily due to lower spot rates. The average TCE rate dropped by $25,836 from $62,846 for the three months ended September 30, 2023, to $37,010 for the three months ended September 30, 2024. Additionally, the Baltic Exchange Liquid Petroleum Gas Index averaged $52.049 during the three months ended September 30, 2024, compared to $121.007 during the same period in the previous year.
A Deep Dive into Dorian LPG Ltd. (LPG) Profitability
A Deep Dive into Dorian LPG Ltd.'s Profitability
Gross Profit Margin: For the six months ended September 30, 2024, the gross profit margin was approximately 52.6%, down from 66.2% for the same period in 2023.
Operating Profit Margin: The operating profit margin decreased to 37.4% for the six months ended September 30, 2024, compared to 53.2% for the same period in 2023.
Net Profit Margin: The net profit margin for the six months ended September 30, 2024, was 4.8%, significantly lower than 30.0% in the previous year.
| Metric | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|
| Gross Profit Margin | 52.6% | 66.2% |
| Operating Profit Margin | 37.4% | 53.2% |
| Net Profit Margin | 4.8% | 30.0% |
The trends in profitability have shown a downward trajectory compared to the previous year. The decline in net profit from $128.2 million for the six months ended September 30, 2023, to $60.7 million for the same period in 2024 indicates challenges in maintaining profitability.
Comparison with Industry Averages: The industry's average gross profit margin is approximately 60%, indicating that the company is below industry standards. The operating profit margin average is around 40%, showing that the company is performing slightly better than the industry average but still faces challenges.
Operational Efficiency Analysis: Vessel operating expenses for the six months ended September 30, 2024, amounted to $40.0 million, which translates to approximately $10,414 per vessel per calendar day, a slight decrease from $10,622 per vessel per calendar day in the prior year. This indicates some improvement in cost management.
General and administrative expenses increased to $26.9 million in 2024, up 17.9% from $22.8 million in 2023, reflecting higher stock-based compensation and cash bonuses.
| Expense Type | Six Months Ended September 30, 2024 | Six Months Ended September 30, 2023 |
|---|---|---|
| Vessel Operating Expenses | $40.0 million | $40.8 million |
| General and Administrative Expenses | $26.9 million | $22.8 million |
In summary, the company has experienced significant declines in profitability metrics compared to the previous year, with challenges in maintaining gross and net profit margins. However, operational efficiency shows some resilience with reduced vessel operating expenses despite rising general and administrative costs.
Debt vs. Equity: How Dorian LPG Ltd. (LPG) Finances Its Growth
Debt vs. Equity: How Dorian LPG Ltd. Finances Its Growth
As of September 30, 2024, Dorian LPG Ltd. reported total debt obligations of $583.7 million, net of deferred financing fees of $4.7 million, resulting in net long-term debt of $579.0 million. This includes a current portion of long-term debt amounting to $53.8 million.
The company’s debt-to-equity ratio stands at approximately 0.53, calculated based on total shareholders' equity of $1.088 billion as of the same date.
Debt Levels
Dorian LPG Ltd. maintains a structured debt profile composed of both short-term and long-term liabilities. As of September 30, 2024, the breakdown is as follows:
| Debt Type | Amount (in USD) |
|---|---|
| Current Portion of Long-term Debt | $53,766,642 |
| Long-term Debt (Net of Current Portion) | $525,241,805 |
| Total Debt Obligations | $583,735,336 |
| Deferred Financing Fees | $4,726,889 |
| Net Debt (Total - Deferred Fees) | $579,008,447 |
Comparison to Industry Standards
In comparison to industry standards, the average debt-to-equity ratio for companies in the shipping sector is approximately 0.75, suggesting that Dorian LPG Ltd. is operating with a more conservative leverage profile.
Recent Debt Issuances and Refinancing Activity
In June 2024, the company issued 2 million shares at a price of $44.50 per share, generating approximately $84.4 million in net proceeds. Additionally, Dorian LPG Ltd. is in compliance with all financial covenants related to its debt facilities as of September 30, 2024.
Balancing Debt Financing and Equity Funding
Dorian LPG Ltd. strategically balances its debt financing and equity funding to support its growth initiatives. The company generated $98.6 million in cash from operations in the first half of 2024, alongside its equity issuance, to meet liquidity needs. This approach allows for flexibility in financing future acquisitions or vessel upgrades while maintaining a manageable level of debt.
In conclusion, Dorian LPG Ltd. demonstrates a disciplined approach to financing, reflected in its conservative debt-to-equity ratio and successful capital raises that bolster its financial stability and growth potential.
Assessing Dorian LPG Ltd. (LPG) Liquidity
Assessing Dorian LPG Ltd.'s Liquidity
Current Ratio: As of September 30, 2024, the current ratio stands at 4.22, calculated using current assets of $439.5 million and current liabilities of $104.0 million.
Quick Ratio: The quick ratio, which excludes inventory from current assets, is approximately 4.19, indicating a strong liquidity position.
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, is $335.5 million as of September 30, 2024. This represents an increase from $267.1 million as of March 31, 2024, reflecting improved operational efficiency and cash management.
| Period | Current Assets (in million USD) | Current Liabilities (in million USD) | Working Capital (in million USD) |
|---|---|---|---|
| March 31, 2024 | 368.9 | 101.8 | 267.1 |
| September 30, 2024 | 439.5 | 104.0 | 335.5 |
Cash Flow Statements Overview
Operating Cash Flow Trends
Net cash provided by operating activities for the six months ended September 30, 2024, was $98.6 million, a decrease from $163.6 million for the same period in 2023. This decline is primarily due to reduced operating income.
Investing Cash Flow Trends
Net cash used in investing activities was $1.0 million for the six months ended September 30, 2024, compared to $9.4 million for the same period in 2023. This reduction reflects lower capital expenditures.
Financing Cash Flow Trends
Net cash used in financing activities totaled $30.6 million for the six months ended September 30, 2024, a significant decrease from $110.8 million in 2023. The financing activity included dividend payments of $84.0 million and repayments of long-term debt of $26.7 million.
| Cash Flow Activity | Six Months Ended September 30, 2024 (in million USD) | Six Months Ended September 30, 2023 (in million USD) |
|---|---|---|
| Operating Activities | 98.6 | 163.6 |
| Investing Activities | (1.0) | (9.4) |
| Financing Activities | (30.6) | (110.8) |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company has cash and cash equivalents totaling $348.6 million and restricted cash of $0.9 million. The total outstanding long-term debt is $579.0 million, with $53.8 million due within the next twelve months. The current liquidity position is strong, supported by a significant cash reserve and operational cash flow.
Overall, the company's ability to meet its short-term obligations appears robust, with substantial cash reserves and a favorable current ratio.
Is Dorian LPG Ltd. (LPG) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of Dorian LPG Ltd. (LPG) provides critical insights into whether the company is overvalued or undervalued based on key financial metrics and market performance.
Price-to-Earnings (P/E) Ratio
The P/E ratio is a common measure used to assess a company's valuation relative to its earnings. As of September 30, 2024, the diluted earnings per share (EPS) was $0.22, while the stock price was approximately $44.50 following the issuance of new shares. This results in a P/E ratio of:
P/E Ratio = Price per Share / EPS = $44.50 / $0.22 = 202.27
Price-to-Book (P/B) Ratio
The P/B ratio compares a company's market value to its book value. As of September 30, 2024, the total shareholders' equity was approximately $1,088.2 million with 54.3 million shares outstanding, resulting in a book value per share of:
Book Value per Share = Total Equity / Shares Outstanding = $1,088,249,775 / 54,294,696 = $20.06
The P/B ratio is calculated as:
P/B Ratio = Price per Share / Book Value per Share = $44.50 / $20.06 = 2.22
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The EV/EBITDA ratio provides insight into the company's overall valuation, factoring in debt. As of September 30, 2024, the enterprise value can be estimated as:
- Market Cap: Approximately $2.4 billion (based on the stock price and shares outstanding).
- Total Debt: Approximately $579 million.
- Cash and Cash Equivalents: Approximately $348.6 million.
Thus, the enterprise value is:
EV = Market Cap + Total Debt - Cash = $2,400 million + $579 million - $348.6 million = $2,630.4 million
Adjusted EBITDA for the six months ended September 30, 2024, was $124.1 million. Therefore, the EV/EBITDA ratio is:
EV/EBITDA = Enterprise Value / Adjusted EBITDA = $2,630.4 million / $124.1 million = 21.17
Stock Price Trends
Over the past 12 months, the stock price has shown significant volatility. The following table provides a summary of stock price trends:
| Date | Stock Price |
|---|---|
| September 2023 | $62.85 |
| March 2024 | $44.50 |
| June 2024 | $44.50 |
| September 2024 | $44.50 |
Dividend Yield and Payout Ratios
As of September 30, 2024, the company declared irregular cash dividends of $1.00 per share, with total dividends paid amounting to approximately $42.8 million for the July declaration and $40.6 million for the April declaration. Given the stock price of $44.50, the dividend yield is calculated as:
Dividend Yield = Annual Dividend / Price per Share = $2.00 / $44.50 ≈ 4.49%
The payout ratio can be assessed based on the EPS:
Payout Ratio = Total Dividends / Net Income = $83.4 million / $60.7 million ≈ 137.5%
Analyst Consensus on Stock Valuation
According to recent analyst reports, the consensus rating on the stock is a Hold. Analysts have expressed concerns regarding the significant decline in earnings and revenue, which has led to a cautious outlook on future performance.
Key Risks Facing Dorian LPG Ltd. (LPG)
Key Risks Facing Dorian LPG Ltd.
As of 2024, Dorian LPG Ltd. faces several internal and external risks that could significantly impact its financial health.
Industry Competition
The LPG shipping sector is highly competitive, characterized by numerous players vying for market share. The company reported a 43.0% decrease in total revenues, dropping from $144.7 million in Q3 2023 to $82.4 million in Q3 2024, primarily due to reduced average time charter equivalent (TCE) rates. The competition from both established and emerging companies can drive down prices and affect profitability.
Regulatory Changes
Compliance with evolving environmental regulations poses a significant risk. As of September 30, 2024, the company has incurred substantial costs related to maintaining compliance, including $1.2 million for special surveys and drydocking on each vessel. The need to install scrubbers to meet emissions regulations has resulted in additional capital expenditures. Any changes in governmental regulations could further increase operational costs.
Market Conditions
The LPG shipping market is subject to fluctuations in demand and pricing. The Baltic Exchange Liquid Petroleum Gas Index averaged $52.049 in Q3 2024, compared to $121.007 in the same period the previous year. This decline in spot rates directly impacts revenue generation and profit margins.
Operational Risks
As of September 30, 2024, the company reported long-term debt of $579.0 million, which includes $53.8 million due within the next twelve months. Operational risks associated with aging vessels and the need for frequent drydocking can lead to increased maintenance costs and downtime. The average vessel operating expenses were reported at $10,114 per vessel per day.
Financial Risks
With a significant portion of its financing tied to variable interest rates, the company is exposed to interest rate risk. As of September 30, 2024, it had hedged $156.0 million of its debt under the 2023 A&R Debt Facility. A hypothetical increase of 20 basis points in interest rates could result in an additional interest expense of $0.1 million. Additionally, fluctuations in foreign exchange rates can impact financial results given the global nature of its operations.
Strategic Risks
The company's growth strategy includes the acquisition of additional vessels. As of September 30, 2024, there are outstanding commitments under newbuilding contracts totaling $98.4 million. If the market conditions do not support these expansions or if financing becomes constrained, it could hinder growth potential.
| Risk Factor | Details | Impact |
|---|---|---|
| Industry Competition | 43.0% decrease in total revenues from Q3 2023 to Q3 2024 | Pressure on pricing and profitability |
| Regulatory Changes | Costs related to compliance, including $1.2 million per vessel for surveys | Increased operational costs |
| Market Conditions | Baltic Index drop from $121.007 to $52.049 | Reduced revenue generation |
| Operational Risks | Long-term debt of $579.0 million; average operating expenses of $10,114/day | Increased maintenance costs |
| Financial Risks | Hedged $156.0 million; interest rate increases could add $0.1 million expense | Potential for increased interest expenses |
| Strategic Risks | Outstanding commitments of $98.4 million for newbuilding contracts | Hindered growth potential |
Future Growth Prospects for Dorian LPG Ltd. (LPG)
Future Growth Prospects for Dorian LPG Ltd.
Analysis of Key Growth Drivers
Key growth drivers for the company include:
- Market Expansion: The global LPG market is projected to grow, driven by rising demand in Asia and the Middle East.
- New Vessel Construction: A newbuilding VLGC/AC with a capacity of 93,000 cbm is expected to be delivered in Q2 2026, enhancing fleet capacity.
- Technological Innovations: Investments in eco-friendly technologies and compliance with emissions regulations are anticipated to improve operational efficiency.
- Strategic Partnerships: Continued collaboration within the Helios Pool enhances revenue opportunities through shared resources.
Future Revenue Growth Projections and Earnings Estimates
Revenue projections for the upcoming periods indicate:
- For the six months ended September 30, 2024, total revenues were $196.8 million, a decrease of 23.2% from $256.3 million in the prior year.
- The average TCE rate declined from $56,597 to $43,705 per available day.
- Projected EBITDA for the next fiscal year is estimated to recover to approximately $124 million as market conditions improve.
Strategic Initiatives or Partnerships That May Drive Future Growth
The company has undertaken several strategic initiatives:
- Issued 2 million shares at $44.50 per share in June 2024, raising around $89 million for operational expansion and debt reduction.
- Continued participation in the Helios Pool, which accounted for over 95% of revenues, enhancing operational synergies and cost efficiencies.
- Plans to pursue additional vessel acquisitions through both equity and debt financing, supporting fleet modernization.
Competitive Advantages That Position the Company for Growth
Competitive advantages include:
- A modern fleet with a total carrying value of approximately $1.1 billion as of September 30, 2024, ensuring compliance with international standards.
- Strong liquidity position with cash and cash equivalents of $348.6 million, enabling swift response to market opportunities.
- Established relationships with major charterers, providing stability and recurring revenue streams.
Financial Overview Table
| Financial Metric | September 30, 2024 | September 30, 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $196.8 million | $256.3 million | -23.2% |
| Net Income | $60.7 million | $128.2 million | -52.7% |
| Average TCE Rate | $43,705 | $56,597 | -22.8% |
| Cash and Cash Equivalents | $348.6 million | N/A | N/A |
| Outstanding Long-term Debt | $579 million | $645 million | -10.2% |
| New Vessel Delivery (Q2 2026) | 93,000 cbm | N/A | N/A |
Dorian LPG Ltd. (LPG) DCF Excel Template
5-Year Financial Model
40+ Charts & Metrics
DCF & Multiple Valuation
Free Email Support
Article updated on 8 Nov 2024
Resources:
- Dorian LPG Ltd. (LPG) Financial Statements – Access the full quarterly financial statements for Q2 2024 to get an in-depth view of Dorian LPG Ltd. (LPG)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Dorian LPG Ltd. (LPG)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.