Dorian LPG Ltd. Announces First Quarter Fiscal Year 2018 Financial Results

Stamford, Conn. - July 31, 2017

Dorian LPG Ltd. (NYSE: LPG) (the "Company" or "Dorian LPG"), a leading owner and operator of modern very large gas carriers ("VLGCs"), today reported its financial results for the three months ended June 30, 2017.

Highlights for the First Quarter Fiscal Year 2018

• On May 31, 2017, we entered into an agreement to amend our $758 million debt facility that we entered into in March 2015 to relax certain covenants, release $26.8 million of restricted cash to be applied towards the next two debt principal payments, interest and certain fees, and modify certain other terms, including an expanded definition of the components of consolidated liquidity.

• On June 8, 2017, we entered into a $97.0 million bridge loan agreement with DNB Capital LLC and used the proceeds to pay off our term loans with the Royal Bank of Scotland (the "RBS Loan Facility") at 96% of the then outstanding principal amount and to pay accrued interest, legal, arrangement and advisory fees related to the bridge loan. As part of this transaction, $6.0 million of cash previously restricted under the RBS Loan Facility was released as unrestricted cash for use in operations.

• Revenues of $41.0 million and Daily Time Charter Equivalent ("TCE")(1) rate for our fleet of $22,735 for the three months ended June 30, 2017.

• Net loss of $(6.7) million, or $(0.12) earnings/(loss) per basic and diluted share ("EPS"), and adjusted net income/(loss)(1) of $(8.4) million, or $(0.16) adjusted diluted earnings/(loss) per share ("adjusted EPS")(1), for the three months ended June 30, 2017.

• Adjusted EBITDA(1) of $17.5 million for the three months ended June 30, 2017.

(1) TCE, adjusted net income/(loss), adjusted EPS and adjusted EBITDA are non-GAAP measures. Refer to the reconciliation of revenues to TCE, net income/(loss) to adjusted net income/(loss), EPS to adjusted EPS and net income/(loss) to adjusted EBITDA included in this press release.

John Hadjipateras, Chairman, President and Chief Executive Officer, commented, "In our first quarter we took steps to strengthen our balance sheet and increase our financial flexibility. We are fortunate to have strong relationships with our lenders. Our focus continues to be on our financial and commercial activities and our goal to create shareholder value by leveraging the high quality of our fleet and operation. LPG trade fundamentals are developing favorably with increased trade gradually absorbing the 50% increase in the world fleet since 2014."

First Quarter Fiscal Year 2017 Results Summary
Our net loss amounted to $(6.7) million, or $(0.12) per share, for the three months ended June 30, 2017, compared to a net loss of $(1.3) million, or $(0.02) per share, for the three months ended June 30, 2016.

Our adjusted net loss amounted to $(8.4) million, or $(0.16) per share for the three months ended June 30, 2017, compared to adjusted net income of $3.1 million, or $0.07 per share for the three months ended June 30, 2016. We have adjusted our net loss for the three months ended June 30, 2017 for unrealized loss on derivative instruments of $2.4 million and a gain on early extinguishment of debt of $4.1 million. Please refer to the reconciliation of net income/(loss) to adjusted net income/(loss), which appears later in this press release.

The decrease of $11.5 million in adjusted net income/(loss) for the three months ended June 30, 2017 compared to the three months ended June 30, 2016 is primarily attributable to reduced revenues of $9.5 million, a $2.9 million increase in general and administrative expenses, a $0.8 million increase in vessel operating expenses, and a $0.5 million increase in interest and finance costs, partially offset by a $1.7 million decrease in realized loss on derivatives and a $0.6 million decrease in voyage expenses.

The TCE rate for our fleet was $22,735 for the three months ended June 30, 2017, a 13.9% decrease from the $26,398 TCE rate from the same period in the prior year, primarily driven by increased bunker costs. Please see footnote 6 to the table in "—Financial Information" below for information related to how we calculate TCE. Total fleet utilization (including the utilization of our vessels deployed in the Helios Pool) decreased from 94.2% in the quarter ended June 30, 2016 to 89.6% in the quarter ended June 30, 2017.

Vessel operating expenses per day increased to $8,434 in the three months ended June 30, 2017 from $8,040 in the same period in the prior year. Please see "Vessel Operating Expenses" below for more information.

Revenues
Revenues, which represent net pool revenues—related party, time charters and other revenues earned by our vessels, were $41.0 million for the three months ended June 30, 2017, a decrease of $9.5 million, or 18.8%, from $50.5 million for the three months ended June 30, 2016. The decrease is primarily attributable to a decrease in average TCE rates from $26,398 for the three months ended June 30, 2016 to $22,735 for the three months ended June 30, 2017. Spot market rates were relatively flat when comparing the three months ended June 30, 2017 with the three months ended June 30, 2016. The Baltic Exchange Liquid Petroleum Gas Index, an index published daily by the Baltic Exchange for the spot market rate for the benchmark Ras Tanura Chiba route (expressed as U.S. dollars per metric ton), averaged $28.813 during the three months ended June 30, 2017 compared to an average of $28.148 for the three months ended June 30, 2016. Therefore, increased bunker costs, which are deducted from gross revenues when calculating TCE rates, drove the decline in TCE rates. Voyage expenses, including bunkers, are typically paid by the charterer under time charters, including our vessels chartered to the Helios Pool. Net pool revenues—related party are calculated on a net basis using gross revenues of the pool vessels less voyage expenses of the pool vessels and general and administrative expenses of the pool.

Voyage Expenses
Voyage expenses were $0.2 million during the three months ended June 30, 2017, a decrease of $0.6 million, or 68.3%, from $0.8 million for the three months ended June 30, 2016. Voyage expenses are all expenses unique to a particular voyage, including bunker fuel consumption, port expenses, canal fees, charter hire commissions, war risk insurance and security costs. Voyage expenses are typically paid by us under voyage charters and by the charterer under time charters, including our vessels chartered to the Helios Pool. Accordingly, we mainly incur voyage expenses for voyage charters or during repositioning voyages between time charters for which no cargo is available or traveling to or from drydocking. The decrease for the three months ended June 30, 2017, when compared with the three months ended June 30, 2016, was mainly attributable to a reduction of port charges and other related expenses along with decreases in war risk insurance and security costs due to a reduction of transits in high-risk areas.

Vessel Operating Expenses
Vessel operating expenses were $16.9 million during the three months ended June 30, 2017, or $8,434 per vessel per calendar day, which is calculated by dividing vessel operating expenses by calendar days for the relevant time period for the vessels that were in our fleet. This was an increase of $0.8 million, or 4.9%, from $16.1 million for the three months ended June 30, 2016. Vessel operating expenses per vessel per calendar day increased $394 from $8,040 for the three months ended June 30, 2016 to $8,434 for the three months ended June 30, 2017. The increase in vessel operating expenses was primarily the result of (i) additional required maintenance on vessels in service for more than one year, (ii) certain spares and stores that were capitalized at delivery being replenished and expensed in the current period, and (iii) general crew wage increases coupled with short-term increases in selected crew complements on certain vessels. Partially offsetting the increases was a reduction of insurance costs reflecting a reduction in premiums for the three months ended June 30, 2017 when compared with the three months ended June 30, 2016.

General and Administrative Expenses
General and administrative expenses were $8.5 million for the three months ended June 30, 2017, an increase of $2.9 million, or 52.1%, from $5.6 million for the three months ended June 30, 2016. The increase was mainly due to an increase of $2.4 million in salaries, wages and benefits and an increase of $0.5 million in stock-based compensation. The increase in salaries, wages and benefits was primarily due to $2.3 million in cash bonuses to various employees that were approved by the Compensation Committee of the Board of Directors and expensed and paid during the three months ended June 30, 2017. Cash bonuses of $3.0 million to various employees paid during the three months ended June 30, 2016 were approved by the Compensation Committee of the Board of Directors and expensed prior to the three months ended June 30, 2016. Other general and administrative expenses remained relatively constant for the three months ended June 30, 2017 when compared to June 30, 2016.

Interest and Finance Costs
Interest and finance costs amounted to $7.5 million for the three months ended June 30, 2017, an increase of $0.5 million, or 6.2%, from $7.0 million for the three months ended June 30, 2016. The increase of $0.5 million during this period was due to (i) an increase in interest incurred on our long-term debt of $0.2 million resulting from an increase in LIBOR, partially offset by a decrease in average indebtedness, (ii) an increase of $0.2 million in amortization of deferred financing fees, and (iii) an increase of $0.1 million in loan expenses. Average indebtedness, excluding deferred financing fees, decreased from $835.3 million for the three months ended June 30, 2016 to $759.6 million for the three months ended June 30, 2017. The outstanding balance of our long-term debt, net of deferred financing fees of $22.1 million, as of June 30, 2017 was $720.3 million.

Unrealized Loss on Derivatives
Unrealized loss on derivatives amounted to a loss of approximately $2.4 million for the three months ended June 30, 2017, compared to a loss of $4.4 million for the three months ended June 30, 2016. The $2.0 million change is primarily attributable to changes in the fair value of our interest rate swaps due to changes in forward LIBOR yield curves.

Realized Loss on Derivatives
Realized loss on derivatives amounted to a loss of approximately $0.6 million for the three months ended June 30, 2017, a decrease of $1.7 million, or 72.8%, from a loss of $2.3 million for the three months ended June 30, 2016. The decrease is attributable to (i) $1.0 million in realized loss on interest rate swaps related to the RBS Loan Facility during the three months ended June 30, 2016 that did not recur during the three months ended June 30, 2017 as the interest rate swaps related to the RBS Loan Facility were terminated subsequent to the three months ended June 30, 2016 and (ii) a decrease of $0.7 million on interest rate swaps related to the 2015 Debt Facility primarily resulting from increases in floating LIBOR.

Gain on early extinguishment of debt
Gain on early extinguishment of debt amounted to $4.1 million for the three months ended June 30, 2017 and was attributable to the repayment of the RBS Loan Facility, net of deferred financing fees. There was no gain on early extinguishment of debt for the three months ended June 30, 2016.

Full report

Dorian LPG Ltd. press release