Disclaimer. Forward-Looking Statements

Transcription

1 September 2015

2 Disclaimer Forward-Looking Statements This Presentation contains certain forward-looking statements relating to the business, future financial performance and results of the Company and/or the industry in which it operates. In particular, this Presentation contains forward-looking statements such as those with respect to cost of construction of the Company s newbuildings and timing of their delivery, values of the assets of the Company and the potential future revenue and EBITDA these assets may yield under current or future contracts, the potential future revenues and cash flows of the Company, the potential future demand and market for the Company s assets and the Company s equity and debt financing requirements and its ability to obtain financing in a timely manner and at favorable terms. Forward-looking statements concern future circumstances and results and other statements that are not historical facts, sometimes identified by the words believes, expects, predicts, intends, projects, plans, estimates, aims, foresees, anticipates, targets, and similar expressions. The forward-looking statements contained in this Presentation, including assumptions, opinions and views of the Company or cited from third party sources, are solely opinions and forecasts which are subject to risks, uncertainties and other factors that may cause actual events to differ materially from any anticipated development. Potential investors are expressly advised that financial projections, such as the revenue and cash flow projections contained herein, cannot be used as reliable indicators of future revenues or cash flows. Neither the Company, nor any of their parent or subsidiary undertakings or any such person s officers or employees provides any assurance that the assumptions underlying such forward-looking statements are free from errors nor does any of them accept any responsibility for the future accuracy of the opinions expressed in this Presentation or the actual occurrence of the forecasted developments. No obligation is assumed to update any forward-looking statements or to conform these forward-looking statements to our actual results. 1

3 Overview: Investment Highlights Fleet Management Chartering strategy Key Counterparties Largest ECO VLGC fleet, VLGCs represent critical link in the LPG supply chain 3 Modern VLGCs, 10 ECO VLGCs, 1 pressurized LPG carrier 9 ECO VLGCs (Delivering Q4 15 Q1 16) Fully Integrated, In-house Commercial & Technical management Balanced mix of time charters and spot exposure, targeting high quality counterparties VLGC Vessel Count Current Fleet End 2015 Feb-16 Average Age (Years) Global presence Entry into LPG 2002 Stamford, CT (Headquarters), London, UK and Athens, Greece End of 2014 End of

4 Key Investment Highlights 1 US shale revolution has created a fundamental shift in trade flows 2 Rapid LPG growth creating tight supply-demand dynamics 3 VLGCs are a critical link in the global LPG supply chain 4 Significant built-in growth with the youngest and largest ECO VLGC fleet 5 Integrated technical and commercial management with proven track record 6 Strong balance sheet ensures flexibility and ability to capitalize on growth opportunities 7 Alignment of management and shareholder interest and significant founder investment 3

5 The Evolution of Dorian LPG Dorian (Hellas), S.A. of Greece was established in 1973, representing the shipping interests of principals with more than a century of shipping experience Entered the LPG market in 2002 through the acquisition of two pressurized vessels followed by four additional acquisitions over the following 18 months Expanded into the VLGC segment by commissioning three newbuildings that were delivered from Our founders and management have collectively invested in excess of US$70m in Dorian LPG since its inception Dorian LPG is the only US headquartered major VLGC owner (Stamford, CT), giving it proximity to major US LPG exporters Offices Headquarters Overview London, UK Stamford, USA Athens, Greece Timeline Significant market presence with 22 Modern VLGCs and targeting further consolidation 10 VLGC NBs Delivered to date. March 2015: Completion of debt financing for NBs May 2014: Successful IPO on the NYSE November 2013: Acquired 13 VLGC NBs from STNG July 2013: Ordered 3 ECO VLGCs at HHI : Placed order for 4xVLGCs at HHI, Korea Aug 2015: Board Authorizes stock buyback of up to $100MM July 2014: Delivery of First NB VLGC Comet at HHI February 2014: Exercised option for 3 additional VLGCs 2011: Dorian wins Statoil s Working Safely with Suppliers Award for Best Shipping Supplier : Dorian Hellas S.A. Acquires first pressurized LPG carriers 4 Source: Dorian LPG

6 Bulk market 40% Retail market 60% VLGCs are a Critical Link in the Global Supply Chain Production LPG (Propane and Butane) is a by-product of oil and gas Shipping VLGCs are the most cost effective means of long haul LPG transportation End Use Broad range of end uses for LPG Gas production (~60%) Cooking / Heating Autogas VLGCs Industrial Oil production and refining (~40%) Chemical Refinery Other The most cost effective means of long haul LPG transportation Source: Poten & Partners 5

7 Global LPG Supply Surging U.S average monthly liftings rising rapidly LPG Volumes traded continuing to grow: 100,000,000 90,000,000 80,000,000 70,000,000 60,000,000 50,000,000 40,000,000 30,000,000 20,000,000 10,000,000 0 Global Seaborne LPG Volumes LTM U.S. set to be the world s single largest LPG exporting nation Competitive Pricing: linked to NGL supply demand dynamics not oil Excess U.S. supply targeted towards export markets Jan Feb Annual (Q4 2014) Source: ICIS China, IHS 6

8 U.S. Taking Market Share Global LPG Export Volumes by Region Source: IHS 7

9 $/MT Million Metric Tons Bifurcation of Supply Making LPG Increasingly Competitive North American Export Terminal Capacity VLGC Equivalent Liftings per Month at Year End Enterprise (Houston, TX) 60 Targa (Galena Park, TX) Sunoco (Nederland, TX) 50 Trafigura (Corpus Christi, TX) 40 Phillips 66 (Freeport, TX) Oxy (Ingleside, TX) 30 Sunoco/MarkW (Marcus Hook, PA) 20 PetroGas (Ferndale, WA) Sage (Longview, WA) 10 Pembina (Portland, Oregon) 0 *VLGC capable terminals only New Price Competition Mont Belvieu Saudi CP Significant Investments in LPG export terminal capacity and midstream processing confirm market commitment to exports Unlike the LNG sector, fewer regulatory approvals are needed for LPG export terminals NGL Production, in excess of domestic demand, has kept U.S. LPG prices low relative to the world market and is driving export growth and further price competition US residential and petchem demand should be offset by increasing use of ethane and natural gas Source: EIA, Bloomberg, IHS, Publically Available Information 8

10 Surge in Chinese PDH adds to Global Demand Project Commenced & Planned Chinese PDH Projects Polypropylene production kt/year Operational Tianjin Bohai 600 Operating Ningbo Haiyue 600 Operating Main Application Propylene derivative, Acrylic acid etc. Propylene derivative, Acrylic acid etc. Satellite Petchem 450 Operating Polypropylene Sanyuan Petchem (JV O.E.) 450 Operating Yangtze Petchem 600 July, 2015 Wanhua Petchem 600 Hebei Haiwei 500 Meide Petchem 660 Ningbo Fortune (O.E.) 660 Expected End 2015 Expected 2016 Expected 2016 Beyond 2016 Propylene derivative, Acrylic acid etc. Propylene derivative, Acrylic acid etc. Polypropylene Polypropylene Polypropylene Polypropylene Tianjin Bohai 2 nd Polypropylene There are currently four Chinese PDH plants in operation VLGC Equivalents Propane Feedstock Required New Cumulative Chinese PDH Propane Feedstock New Cumulative Chinese PDH Propylene Production End 2013 End 2014 End 2015 End 2016 End 2017 Propylene Capacity (000 tonnes) ,000 All Planned PDH importers require high purity propane, best sourced from the US or Middle East It is estimated that total new propane demand from Chinese PDH plants in 2015 will be about 2 million tonnes 10,000 8,000 6,000 4,000 2,000 0 Sinopec, Tianjin Bohai, Oriental Energy, Fujain Meide, and Shaoxing Sanyuan Petrochemical have all signed long term supply contracts for US LPG China is expected to reduce its reliance on imported polypropylene, which currently accounts for approximately 30% of its demand Note: Propylene production capacity to VLGC Equivalents of Propane demand: 1 tonne of propylene requires 1.18 tonnes of propane; 1 VLGC equivalent is 44,000 tonnes of propane Source: ICIS, Poten & Partners 9

11 Growing Markets for LPG Turkey China US Virgin Islands India Indonesia Brazil East Africa Thailand South Africa 10 10

12 Key Factors Favoring LPG Adoption for Power Generation and Retail Consumption Economic Environmental Low cost Infrastructure Easy to set up distribution By-product of natural gas and oil production Favorable Emission Autogas -most accepted alternative fuel Price competitive Newly bifurcated supply dynamics By-product of oil and nat gas production 20% less CO2 than heating oil 50% less CO2 than coal Avoids harmful and dangerous waste LPG should be the fuel of choice for emerging economies Source: ExceptionalEnergy.com 11

13 The Future: Virgin Islands Conversion Project with Vitol Vitol is leading the transformation of the power sector in the US Virgin Islands Upon completion of the $91mm project, Virgin Island power consumers can expect savings of up to 30% Current Residential prices: 39cents/KW hour vs 51cents in Sep By July, both St. Thomas and St Croix will derive 100% of their electricity needs from propane Green house gas emissions slated to decline 20% St Croix Conversion St Thomas Conversion - VLGCS will deliver the cargo and perform STS to pressure vessels every 3 days (w/ two designated pressure vessels) for discharge at the small berth 12

14 China Retail & Power Generation Seaborne LPG imports into China tallied 7,993,199 MT in 2014, up from 3,980,283 MT in 2013 While this was primarily due to PDH plant start ups, there are opportunities for further expansion in Power Gen and Retail. Retail growth is very dependent on government policy. China s Clean Air Action Plan has 2017 target could see new projects China s residential / commercial demand has been climbing in tandem with their initiative to displace solid biofuels in rural areas LPG Demand for Power Gen could increase as post-crash LPG prices threaten LNG Consolidation Ex: China Gas Holdings acquired retail competitor and LPG trader: Panva Gas in 2013 The group has 8 LPG terminals with over 300,000m3 storage and 98 LPG distribution projects covering 10 different provinces Sources : General Administration of Customs and the National Bureau of Statistics. 13

15 India Seaborne LPG imports to India were up 142% in 2014, from 5,857,859 to 8,324,550. Indian LPG Retail Demand : Total demand growth for LPG in India increased abt. 18.5% : Government has proactively pushed population away from traditional heating/cooking methods by subsidizing LPG 2014: The cap on subsidized cylinders per household was lifted from 9 to 12 Demand expected to increase within residential and commercial sector Source: Poten & Partners 14

16 Dayrate in USD/day VLGC Day Rates at Healthy Levels Baltic VLGC Rate: 160, , , ,000 80,000 TCE/day 6M Trailing Average 3Yr Trailing Average 60,000 40,000 20,000 - Key Drivers of Rate Strength Rapid increase in VLGC liftings from the USGC (Targa, Enterprise, P66) Increasing arbitrage movements West to East resulting in higher tonne-mile demand Demand from India, China, and SEA absorbing incremental LPG tonnage 15

17 Fleet Built at World Class Korean Shipyards VLGC Newbuild Deliveries by Shipyard % 13% 7% 60% HHI is the most active and experienced yard in the design and construction of gas carriers * 7% LPG vessels are highly engineered, and exacting technical specifications determine commercial acceptance HHI and DSME also design and build some of the world s most complex offshore vessels and rigs Dorian has built 17 vessels at HHI since 2004 and maintains a strong relationship Source: Clarksons 16

18 Fleet Designed to Meet Tomorrow s Regulations Outside an ECA 0.50% m/m on and after 1 January 2020 Inside an ECA 0.10% m/m on and after 1 January 2015 Dorian LPG will have the youngest and most modern fleet of ECO VLGCs Existing Scrubber Ready Scrubber -Already Declared ECA: Emission Control Areas Source: International Maritime Organization Note: Regulations established to limit SOx and particulate matter emissions 17

19 ECO-Vessels Represent Significant Additional Earnings Potential Scrubber / Scrubber Ready Fuel Oil Consumption Analysis Low Friction, Self Polishing Paint Dorian ME-G type NB (ECO) Traditional VLGC % % MAN B&W s New G-Type Engine Electronic Engine Control De-rated, Long Stroke Design Improved Propeller Design Optimized Hull Design Babcock s New LGE Cooling Plant Greater Re-liquefaction Efficiency Ethane in LPG Mix: 8% vs. 2.5% Cargo Combinations: 16 vs. 8 Cooling Capability: -52º vs. -48ºC 25 Marine Gas Oil (MGO) Heavy Fuel Oil (HFO) Optimized Hull Design Average daily fuel savings of >$3,000 1 Source: Hyundai Heavy Industries (HHI), MAN B&W, FT Maritime Services, Company, Managers ¹ Fuel saving assuming loaded condition at 16 knots and Fuel price at USD 450/MT for HFO (Basis AG-East round trip voyage, including port days) 18

20 Major Oil Companies Require Experienced Operators Integrated, LPG Company with all Commercial/Technical services in-house. Meets requirements of the most demanding Oil Majors Dedicated, Independent department on HSSEQ (Health, Safety, Security, Environment and Quality) Doubling up crews on VLGCs in order to meet officer matrix requirements for future NB deliveries Creating new training department under HSSEQ focused solely on Dorian SMS familiarization for new crew US presence provides proximity to US based Oil Majors and traders and easy access to US export terminals Working Safely with Suppliers Award Awarded by Statoil to Dorian for outstanding service and performance and steadfast commitment to HSE over 30 other shipping service providers 19

21 Dorian LPG Fleet Overview Overview of Chartering Strategy Overview of Vessel Employment 4 R Customers & Shareholders: Current Fleet: Sister Shipyard Vessels Delivery / Open H 14 2H 14 1H 15 2H 15 1H 16 2H'16 Return on Capital: Mix of long term and spot charters Regular Employment: Fleet utilization Risk Management: Strong counterparties Responsive: To customers and the market Legend Past charters Current charters Spot Market Delivery date Captain Nicholas ML A - Captain John NP A - Captain Markos NL A Q3 19 Grendon - - Comet B Q2 19 Corsair B Q2 18 Corvette B - Cougar B Q2 15 Concorde B Q2 15 Cobra B Q2 16 Continental B Q3 15 Constitution B Q3 15 Commodore B Q3 15 Cresques C Q3 15 Newbuildings: Constellation B Q3 15 Cheyenne B Q4 15 Cratis B Q4 15 Clermont B Q4 15 Chaparral C Q4 15 Commander C Q4 15 Copernicus B Q4 15 Challenger B Q1 16 Caravelle B Q1 16 Statoil Statoil Shell, Q Q Petrobras Shell, Q Q Exxon Mobil, Q Q Shell, Q Q2 2016* *Cobra 12 Month TC to Shell is through the Helios LPG Pool 20

22 Strategic Business Development Initiatives Pool with Phoenix Tankers Ltd., one of the foremost VLGC operators in Asia Expands the Company s global presence and strengthen its position in the increasingly important Eastern LPG market including India Increases overall fleet utilization Alliance with HNA Group of China Enhances Dorian LPG s access to and knowledge of the Chinese LPG market and customers 21 21

23 Fully Funded Financing Dorian LPG has committed a committed debt facility of $758 million to finance its fleet of newbuilding VLGCs from: Tranches Commercial Debt $ 249 mm KEXIM Direct $ 204 mm KEXIM Guaranteed $ 202 mm K-Sure Insured $ 103 mm Total Debt: $ 758 mm Key metrics on financing package: Weighted average margin over Libor 2.1% Weighted average profile 14 Years 22

24 Multiple Pillars for Creating Shareholder Value Fleet of 22 VLGCs with 19 ECO newbuilds contracted for delivery 2015 February 2016 Expect to have opportunities to increase exposure through: pooling arrangements, further vessel acquisitions and strategic partnerships with major oil companies and traders Time chartering strategy creates opportunity for shareholders to realize more value through potential MLP-style monetizations Strong, moderately leveraged balance sheet and stable earnings create opportunities to fund growth or pay dividends Board authorized $100 MM stock buyback program 23

25 Key Investment Highlights 1 US shale revolution has created a fundamental shift in trade flows 2 Rapid LPG growth creating tight supply-demand dynamics 3 VLGCs are a critical link in the global LPG supply chain 4 Significant built-in growth with the youngest and largest ECO VLGC fleet 5 Integrated technical and commercial management with proven track record 6 Strong balance sheet ensures flexibility and ability to capitalize on growth opportunities 7 Alignment of management and shareholder interest and significant founder investment 24

26 Statement of Operations (in USD) Statement of Operations Three Months Ended June 30, 2015 (Unaudited) Three Months Ended June 30, 2014 (Unaudited) Revenues $ 20,331,901 $ 15,853,840 Net pool income 15,310,559 Voyage expenses 3,523,073 2,785,998 Vessel operating expenses 6,754,086 3,483,123 Management fees related party 1,125,000 General and administrative expenses 7,214, ,506 EBITDA 18,151,021 7,667,213 Depreciation and amortization 4,857,427 2,466,942 Operating income 13,293,594 5,200,271 Other income/(loss), net 359,289 (1,533,022) Net income $ 13,652,883 $ 3,667,249 Time charter equivalent rate (1) $ 55,474 $ 39,243 Daily vessel operating expenses (2) $ 10,203 $ 9,569 Adjusted EBITDA (3) $ 19,400,254 $ 7,709,126 (1) Our method of calculating time charter equivalent rate is to divide revenue net of voyage expenses by operating days for the relevant time period. (2) Calculated by dividing vessel operating expenses by calendar days for the relevant time period. (3) Represents net income before interest and finance costs, gain/loss on derivatives-net, stock compensation expense and depreciation and amortization and is used as a supplemental financial measure by management to assess our financial and operating performance. 25

27 Balance Sheet and Cash Flows (in USD) Balance Sheet June 30, 2015 (Unaudited) March 31, 2015 (Audited) Cash and cash equivalents $ 134,715,783 $ 204,821,183 Restricted cash, non-current 36,512,789 33,210,000 Total assets 1,240,826,724 1,099,101,270 Current portion of long-term debt 25,325,629 15,677,553 Long-term debt net of current portion 299,577, ,665,874 Total liabilities 353,063, ,887,011 Total shareholders' equity $ 887,763,681 $ 873,214,259 Cash Flows Three Months Ended June 30, 2015 (Unaudited) Three Months Ended June 30, 2014 (Unaudited) Net income $ 13,652,883 $ 3,667,249 Adjustments 4,611,152 2,907,009 Changes in operating assets and liabilities (1,371,228) (3,094,348) Net cash provided by operating activities 16,892,807 3,479,910 Net cash used in investing activities (207,434,058) (61,272,300) Net cash provided by financing activities 120,341, ,930,747 Effects of exchange rates on cash and cash equivalents 94,657 (120,830) Net (decrease)/increase in cash and cash equivalents $ (70,105,400) $ 96,017,527 26

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