DORIAN LPG LTD. [LPG] Filings

10-Q 1 lpg-20211231x10q.htm 10-Q

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number: 001-36437

Dorian LPG Ltd.

(Exact name of registrant as specified in its charter)


Marshall Islands		66-0818228
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
c/o Dorian LPG (USA) LLC
27 Signal Road, Stamford, CT		06902
(Address of principal executive offices)		(Zip Code)

Registrant's telephone number, including area code: (203) 674-9900

Former name, former address and former fiscal year, if changed since last report: Not Applicable

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:


Title of Each Class	Trading Symbol	Name of Each Exchange on Which Registered
Common stock, par value $0.01 per share	LPG	New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐	Accelerated filer ☒	Non-accelerated filer ☐
Smaller reporting company ☐	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ☒

As of January 31, 2022, there were 40,138,956 shares of the registrant’s common stock outstanding.

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FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and the Private Securities Litigation Reform Act of 1995 (the “PSLRA”), including analyses and other information based on forecasts of future results and estimates of amounts not yet determinable and statements relating to our future prospects, developments and business strategies. Such forward-looking statements are intended to be covered by the safe harbor provided for under the sections referenced in the immediately preceding sentence and the PSLRA. Forward-looking statements are generally identified by their use of terms and phrases such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “forecast,” “intend,” “likely,” “may,” “might,” “pending,” “plan,” “possible,” “potential,” “predict,” “project,” “seeks,” “should,” “targets,” “will,” “would,” and similar terms and phrases, including references to assumptions. Where we express an expectation or belief as to future events or results, such expectation or belief is expressed in good faith and believed to have a reasonable basis. However, our forward-looking statements are subject to risks, uncertainties, and other factors, which could cause actual future activities and results of operations to differ materially from future results expressed, projected, or implied by those forward-looking statements in this quarterly report.

These risks include the risks that are identified in the “Risk Factors” section of this quarterly report and of our Annual Report on Form 10-K for the fiscal year ended March 31, 2021, and also include, among others, risks associated with the following:

●

our future operating or financial results;

●

our business strategies, including with respect to acquisitions and chartering, and expected capital spending or operating expenses, as well as any difficulty we may have in managing planned growth properly;

●

shipping trends, including changes in charter rates applicable to alternative propulsion technologies, scrubber equipped and non-scrubber equipped vessels, scrapping rates and vessel and other asset values;

●

changes in trading patterns that impact tonnage requirements;

●

compliance with laws, treaties, rules, regulations and policies (including amendments or other changes thereto) applicable to the liquefied petroleum gas, or LPG, shipping industry, including, without limitation, legislation adopted by international organizations such as the International Maritime Organization and the European Union or by individual countries, as well as the impact and costs of our compliance with, and the potential of liability under, such laws, treaties, rules, regulations and policies;

●

the timing, cost and prospects of purchasing, installing and operating exhaust gas cleaning systems (commonly referred to as “scrubbers”) to reduce sulfur emissions on certain of our vessels;

●

charterers’ increasing emphasis on environmental and safety concerns and investors’ increasing scrutiny and changing expectations with respect to public company Environmental, Social and Governance policies;

●

general economic conditions and specific economic conditions in the oil and natural gas industry and the countries and regions where LPG is produced and consumed;

●

completion of infrastructure projects to support marine transportation of LPG, including export terminals and pipelines;

●

factors affecting supply of and demand for LPG, LPG shipping, and LPG vessels, including, among other things: the production levels, price and worldwide consumption and storage of oil, refined petroleum products and natural gas, including production from United States shale fields; any oversupply of or limited demand for LPG vessels comparable to ours or higher specification vessels; trade conflicts and the imposition of tariffs or otherwise on LPG or LPG products resulting from domestic and international

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political and geopolitical conditions; and shifts in consumer demand from LPG towards other energy sources;

●

any decrease in the value of the charter-free market values of our vessels or reduction in our charter hire rates and profitability associated with such vessels as a result of increase in the supply of or decrease in the demand for LPG, LPG shipping or LPG vessels;

●

business disruptions, including supply chain issues, due to natural or other disasters, or otherwise;

●

greater than anticipated levels of LPG vessel newbuilding orders or lower than anticipated rates of LPG vessel scrapping;

●

the aging of the Company’s fleet which could result in increased operating costs, impairment or loss of hire;

●

our ability to profitably employ our vessels, including vessels participating in the Helios Pool (defined below);

●

unavailability of spot charters and the volatility of prevailing spot market charter rates, which may affect our ability to realize the expected benefits from our time chartered-in vessels, including those in the Helios Pool;

●

failure of our charterers or other counterparties to meet their obligations under our charter agreements;

●

shareholders’ reliance on us to enforce our rights against contract counterparties;

●

competition in the LPG shipping industry, including our ability to compete successfully for future chartering opportunities and newbuilding opportunities (if any);

●

future purchase prices of newbuildings and secondhand vessels and timely deliveries of such vessels (if any) and, relatedly, the risks associated with the purchase of second-hand vessels;

●

the performance of the Helios Pool, including the failure of its significant customers to perform their obligations and the loss or reduction in business from its significant customers (or if the same were to occur with respect to our significant customers);

●

the availability of (and our ability to obtain such) financing and refinancing to fund capital expenditures, acquisitions and other general corporate purposes, the terms of such financing and our ability to comply with the restrictions and other covenants set forth in our existing and future debt agreements and financing arrangements (and to repay or refinance our existing debt and settling of interest rate swaps, if any);

●

our costs, including crew wages, insurance, provisions, repairs and maintenance, general and administrative expenses, drydocking, and bunker prices, as applicable;

●

any inability to retain and recruit qualified key executives, key employees, key consultants or skilled workers and, relatedly, our dependence on key personnel and the availability of skilled workers and the related labor costs;

●

the potential difference in interests between or among certain of our directors, officers, key executives and shareholders;

●

quality and efficiency requirements from customers and developments regarding the technologies relating to oil exploration and the effects of new products and new technology in our industry, including with respect to equipment propulsion and overall vessel efficiency;

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●

potential changes in regulation that would require the installation of Engine Power Limitation (EPL) systems on our vessels to reduce fuel use and carbon emissions, and increase the level of energy efficiency;

●

operating hazards in the maritime transportation industry, including accidents, political events, public health threats (including the outbreak of communicable diseases), international hostilities and instability, armed conflict, piracy, attacks on vessels or other petroleum-related infrastructures and acts by terrorists, which may cause potential disruption of shipping routes;

●

the length and severity of the ongoing coronavirus outbreak (COVID-19), including its impact on the demand for commercial seaborne transportation of LPG and the condition of financial markets and the potential knock-on impacts to our global operations;

●

the adequacy of our insurance coverage in the event of a catastrophic event;

●

the failure to protect our information systems against security breaches, or the failure or unavailability of these systems for a significant period;

●

the arresting or attachment of one or more of our vessels by maritime claimants;

●

compliance with and changes to governmental, tax, environmental and safety laws and regulations, which may add to our costs or the costs of our customers;

●

fluctuations in currencies and interest rates and the impact of the discontinuance of the London Interbank Offered Rate for U.S. Dollars, or LIBOR, after June 30, 2023 on any of our debt referencing LIBOR in the interest rate;

●

compliance with the United States Foreign Corrupt Practices Act of 1977, the United Kingdom Bribery Act 2010, or other applicable regulations relating to bribery;

●

the volatility of the price of shares of our common stock (our “common shares”) and future sales of our common shares;

●

our incorporation under the laws of the Republic of the Marshall Islands and the different rights to relief that may be available compared to other countries, including the United States;

●

congestion at or blockages of ports or canals;

●

any developments in the existing Panama Canal transportation structure as a result of the study announced by the Panamanian government and Energy Transfer LP to analyze the prospects of building an LPG pipeline, potentially running beside the existing Panama Canal and linking the Atlantic Ocean with the Pacific Ocean;

●

if we are required to pay tax on U.S. source income;

●

if we are treated as a “passive foreign investment company”; and

●

other factors detailed in this report and from time to time in our periodic reports.

Actual results could differ materially from expectations expressed in the forward-looking statements in this quarterly report if one or more of the underlying assumptions or expectations proves to be inaccurate or is not realized. You should thoroughly read this quarterly report with the understanding that our actual future results may be materially different from and worse than what we expect. Other sections of this quarterly report include additional factors that could

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adversely impact our business and financial performance. Moreover, we operate in an evolving environment. New risk factors and uncertainties emerge from time to time and it is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We qualify all of the forward-looking statements by these cautionary statements.

We caution readers of this quarterly report not to place undue reliance on forward-looking statements. Any forward-looking statements contained herein are made only as of the date of this report, and we undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

As used in this quarterly report and unless otherwise indicated, references to “Dorian,” the “Company,” “we,” “our,” “us,” or similar terms refer to Dorian LPG Ltd. and its subsidiaries.

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Dorian LPG Ltd.

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PART I.	FINANCIAL INFORMATION

ITEM 1.		FINANCIAL STATEMENTS
		Unaudited Condensed Consolidated Balance Sheets as of December 31, 2021 and March 31, 2021	1
		Unaudited Condensed Consolidated Statements of Operations for the three and nine months ended December 31, 2021 and December 31, 2020	2
		Unaudited Condensed Consolidated Statements of Shareholders' Equity for the nine months ended December 31, 2021 and December 31, 2020	3
		Unaudited Condensed Consolidated Statements of Cash Flows for the nine months ended December 31, 2021 and December 31, 2020	4
		Notes to Unaudited Condensed Consolidated Financial Statements	5

ITEM 2.		MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	20
ITEM 3.		QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	32
ITEM 4.		CONTROLS AND PROCEDURES	32


PART II.	OTHER INFORMATION

ITEM 1.		LEGAL PROCEEDINGS	33
ITEM 1A.		RISK FACTORS	33
ITEM 2.		UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	33
ITEM 6.		EXHIBITS	33

EXHIBIT INDEX			34
SIGNATURES			35

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PART I — FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

Dorian LPG Ltd.

Unaudited Condensed Consolidated Balance Sheets

(Expressed in United States Dollars, except for share data)


	As of		As of
	December 31, 2021		March 31, 2021
Assets
Current assets
Cash and cash equivalents	$	115,807,905	$	79,330,007
Restricted cash—current		—		5,315,951
Trade receivables, net and accrued revenues		—		202,221
Due from related parties		47,487,533		56,191,375
Inventories		2,361,139		2,007,464
Vessel held for sale		43,417,348		—
Prepaid expenses and other current assets		8,384,018		10,296,229
Total current assets		217,457,943		153,343,247
Fixed assets
Vessels, net		1,252,405,737		1,377,028,255
Vessels under construction		16,167,470		—
Other fixed assets, net		84,799		148,836
Total fixed assets		1,268,658,006		1,377,177,091
Other non-current assets
Deferred charges, net		10,537,511		10,158,202
Due from related parties—non-current		20,900,000		23,100,000
Restricted cash—non-current		78,946		81,241
Operating lease right-of-use assets		10,517,796		17,672,227
Other non-current assets		94,580		82,837
Total assets	$	1,528,244,782	$	1,581,614,845
Liabilities and shareholders’ equity
Current liabilities
Trade accounts payable	$	9,271,885	$	9,831,328
Accrued expenses		3,906,423		8,765,264
Due to related parties		360,682		117,803
Deferred income		1,628,133		853,983
Derivative instruments		205,869		1,100,529
Current portion of long-term operating lease liabilities		9,704,781		9,591,447
Current portion of long-term debt		69,530,028		51,820,283
Dividends payable		247,090		—
Total current liabilities		94,854,891		82,080,637
Long-term liabilities
Long-term debt—net of current portion and deferred financing fees		506,737,795		539,651,761
Long-term operating lease liabilities		802,793		8,080,995
Derivative instruments		144,057		3,454,862
Other long-term liabilities		1,514,183		1,521,260
Total long-term liabilities		509,198,828		552,708,878
Total liabilities		604,053,719		634,789,515
Commitments and contingencies
Shareholders’ equity
Preferred stock, $0.01 par value, 50,000,000 shares authorized, none issued nor outstanding		—		—
Common stock, $0.01 par value, 450,000,000 shares authorized, 51,275,609 and 51,071,409 shares issued, 40,138,956 and 41,493,275 shares outstanding (net of treasury stock), as of December 31, 2021 and March 31, 2021, respectively		512,757		510,715
Additional paid-in-capital		759,390,376		756,776,217
Treasury stock, at cost; 11,136,653 and 9,578,134 shares as of December 31, 2021 and March 31, 2021, respectively		(121,226,936)		(99,862,114)
Retained earnings		285,514,866		289,400,512
Total shareholders’ equity		924,191,063		946,825,330
Total liabilities and shareholders’ equity	$	1,528,244,782	$	1,581,614,845

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Operations

(Expressed in United States Dollars)


	Three months ended				Nine months ended
	December 31, 2021		December 31, 2020		December 31, 2021		December 31, 2020
Revenues
Net pool revenues—related party	$	62,856,243	$	82,659,967	$	174,739,894	$	199,312,944
Time charter revenues		5,301,134		4,665,664		15,915,876		13,928,732
Other revenues, net		442,405		1,153,393		3,981,608		3,112,949
Total revenues		68,599,782		88,479,024		194,637,378		216,354,625
Expenses
Voyage expenses		779,746		752,404		3,200,751		2,426,518
Charter hire expenses		4,917,012		4,392,132		10,829,050		13,626,580
Vessel operating expenses		18,205,762		19,202,291		56,916,054		58,027,558
Depreciation and amortization		16,859,224		17,253,447		50,771,237		51,346,574
General and administrative expenses		5,867,454		5,548,526		23,257,989		22,764,312
Total expenses		46,629,198		47,148,800		144,975,081		148,191,542
Gain on disposal of vessel		—		—		3,466,210		—
Other income—related parties		580,388		545,311		1,793,663		1,646,014
Operating income		22,550,972		41,875,535		54,922,170		69,809,097
Other income/(expenses)
Interest and finance costs		(7,412,231)		(6,087,193)		(18,619,712)		(21,839,573)
Interest income		53,792		53,197		279,195		269,381
Unrealized gain on derivatives		3,056,741		479,534		4,205,465		3,952,414
Realized loss on derivatives		(895,782)		(760,991)		(2,714,337)		(3,696,915)
Other gain/(loss), net		(772,607)		265,182		(1,520,993)		36,815
Total other income/(expenses), net		(5,970,087)		(6,050,271)		(18,370,382)		(21,277,878)
Net income	$	16,580,885	$	35,825,264	$	36,551,788	$	48,531,219

Weighted average shares outstanding:
Basic		39,890,674		50,255,908		40,305,902		50,511,473
Diluted		40,025,399		50,368,392		40,460,665		50,605,985

Earnings per common share—basic	$	0.42	$	0.71	$	0.91	$	0.96
Earnings per common share—diluted	$	0.41	$	0.71	$	0.90	$	0.96

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Shareholders’ Equity

(Expressed in United States Dollars, except for number of shares)


	Number of					Additional
	common	Common		Treasury		paid-in		Retained
	shares	stock		stock		capital		Earnings		Total
Balance, April 1, 2020	59,083,290	$	590,833	$	(87,183,865)	$	866,809,371	$	196,835,859	$	977,052,198
Net income for the period	—		—		—		—		12,168,005		12,168,005
Restricted share award issuances	351,629		3,516		—		(3,516)		—		—
Stock-based compensation	—		—		—		1,930,902		—		1,930,902
Purchase of treasury stock	—		—		(1,198,214)		—		—		(1,198,214)
Balance, June 30, 2020	59,434,919	$	594,349	$	(88,382,079)	$	868,736,757	$	209,003,864	$	989,952,891
Net income for the period	—		—		—		—		537,950		537,950
Restricted share award issuances	15,100		151		—		(151)		—		—
Stock-based compensation	—		—		—		406,721		—		406,721
Purchase of treasury stock	—		—		(1,306,388)		—		—		(1,306,388)
Balance, September 30, 2020	59,450,019	$	594,500	$	(89,688,467)	$	869,143,327	$	209,541,814	$	989,591,174
Net income for the period	—		—		—		—		35,825,264		35,825,264
Restricted share award issuances	15,105		151		—		(151)		—		—
Stock-based compensation	—		—		—		530,068		—		530,068
Purchase of treasury stock	—		—		(10,173,647)		—		—		(10,173,647)
Balance, December 31, 2020	59,465,124	$	594,651	$	(99,862,114)	$	869,673,244	$	245,367,078	$	1,015,772,859

	Number of					Additional
	common	Common		Treasury		paid-in		Retained
	shares	stock		stock		capital		Earnings		Total
Balance, April 1, 2021	51,071,409	$	510,715	$	(99,862,114)	$	756,776,217	$	289,400,512	$	946,825,330
Net income for the period	—		—		—		—		5,869,100		5,869,100
Restricted share award issuances	15,800		158		—		(158)		—		—
Stock-based compensation	—		—		—		647,124		—		647,124
Purchase of treasury stock	—		—		(14,793,180)		—		—		(14,793,180)
Balance, June 30, 2021	51,087,209	$	510,873	$	(114,655,294)	$	757,423,183	$	295,269,612	$	938,548,374
Net income for the period	—		—		—		—		14,101,803		14,101,803
Restricted share award issuances	188,400		1,884		—		(1,884)		—		—
Dividend	—		—		—		—		(40,437,434)		(40,437,434)
Stock-based compensation	—		—		—		1,290,254		—		1,290,254
Purchase of treasury stock	—		—		(6,553,707)		—		—		(6,553,707)
Balance, September 30, 2021	51,275,609	$	512,757	$	(121,209,001)	$	758,711,553	$	268,933,981	$	906,949,290
Net income for the period	—		—		—		—		16,580,885		16,580,885
Stock-based compensation	—		—		—		678,823		—		678,823
Purchase of treasury stock	—		—		(17,935)		—		—		(17,935)
Balance, December 31, 2021	51,275,609	$	512,757	$	(121,226,936)	$	759,390,376	$	285,514,866	$	924,191,063

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Dorian LPG Ltd.

Unaudited Condensed Consolidated Statements of Cash Flows

(Expressed in United States Dollars)



	Nine months ended
	December 31, 2021		December 31, 2020
Cash flows from operating activities:
Net income	$	36,551,788	$	48,531,219
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		50,771,237		51,346,574
Amortization of operating lease right-of-use assets		7,148,483		6,876,606
Amortization of financing costs		3,232,626		4,005,265
Unrealized gain on derivatives		(4,205,465)		(3,952,414)
Stock-based compensation expense		2,616,201		2,867,691
Gain on disposal of vessel		(3,466,210)		—
Unrealized foreign currency (gain)/loss, net		205,279		(236,303)
Other non-cash items, net		1,342,894		(411,380)
Changes in operating assets and liabilities
Trade receivables, net and accrued revenue		202,221		820,414
Prepaid expenses and other current assets		(960,151)		(1,755,118)
Due from related parties		10,148,374		(9,152,171)
Inventories		(408,693)		(134,090)
Other non-current assets		(11,743)		1,471,650
Operating lease liabilities—current and long-term		(7,158,734)		(6,877,479)
Trade accounts payable		(352,460)		(37,288)
Accrued expenses and other liabilities		(3,998,726)		(863,951)
Due to related parties		242,879		(183,387)
Payments for drydocking costs		(3,128,235)		(4,720,105)
Net cash provided by operating activities		88,771,565		87,595,733
Cash flows from investing activities:
Payments for vessels under construction and vessel capital expenditures		(22,225,882)		(9,301,455)
Purchase of investment securities		(2,250,681)		(488,231)
Proceeds from sale of investment securities		3,742,429		—
Proceeds from maturity of short-term investments		—		15,000,000
Proceeds from disposal of vessel		43,283,021		—
Payments to acquire other fixed assets		—		(11,566)
Net cash provided by investing activities		22,548,887		5,198,748
Cash flows from financing activities:
Proceeds from long-term debt borrowings		83,400,000		55,378,172
Repayment of long-term debt borrowings		(100,526,209)		(86,463,325)
Repurchase of common stock		(21,346,885)		(11,659,822)
Financing costs paid		(1,357,545)		(3,997,015)
Dividend paid		(40,210,344)		—
Net cash used in financing activities		(80,040,983)		(46,741,990)
Effects of exchange rates on cash and cash equivalents		(119,817)		237,011
Net increase in cash, cash equivalents, and restricted cash		31,159,652		46,289,502
Cash, cash equivalents, and restricted cash at the beginning of the period		84,727,199		87,389,127
Cash, cash equivalents, and restricted cash at the end of the period	$	115,886,851	$	133,678,629

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

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Dorian LPG Ltd.

Notes to Unaudited Condensed Consolidated Financial Statements

(Expressed in United States Dollars)

1. Basis of Presentation and General Information

Dorian LPG Ltd. (“Dorian”) was incorporated on July 1, 2013 under the laws of the Republic of the Marshall Islands, is headquartered in the United States, and is engaged in the transportation of liquefied petroleum gas (“LPG”) worldwide. Specifically, Dorian and its subsidiaries (together “we”, “us”, “our”, or the “Company”) are focused on owning and operating very large gas carriers (“VLGCs”), each with a cargo carrying capacity of greater than 80,000 cbm, in the LPG shipping industry. As of December 31, 2021, our fleet consists of twenty-three VLGCs, including nineteen fuel-efficient 84,000 cbm ECO-design VLGCs (“ECO-VLGCs”), two 82,000 cbm VLGCs and two time chartered-in ECO-VLGCs. As of December 31, 2021, thirteen of our ECO-VLGCs, including one of our time chartered-in ECO-VLGCs, are equipped with exhaust gas cleaning systems (commonly referred to as “scrubbers”) to reduce sulfur emissions. We provide in-house commercial management services for all of our vessels, including our vessels deployed in the Helios Pool (defined below), which may also receive commercial management services from Phoenix (defined below). Excluding our time chartered-in vessels, we provide in-house technical management services for all of our vessels, including our vessels deployed in the Helios Pool (defined below).

On April 1, 2015, Dorian and Phoenix Tankers Pte. Ltd. (“Phoenix”) began operations of Helios LPG Pool LLC (the “Helios Pool”), which entered into pool participation agreements for the purpose of establishing and operating, as charterer, under variable rate time charters to be entered into with owners or disponent owners of VLGCs, a commercial pool of VLGCs whereby revenues and expenses are shared. Refer to Note 3 below for further description of the Helios Pool.

The unaudited interim condensed consolidated financial statements and related notes have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) for interim financial information and related Securities and Exchange Commission (“SEC”) rules for interim financial reporting. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In our opinion, all adjustments, consisting of normal recurring items, necessary for a fair presentation of financial position, operating results and cash flows have been included in the unaudited interim condensed consolidated financial statements and related notes. The unaudited interim condensed consolidated financial statements and related notes should be read in conjunction with the audited consolidated financial statements and related notes for the year ended March 31, 2021 included in our Annual Report on Form 10-K filed with the SEC on June 2, 2021.

Our interim results are subject to seasonal and other fluctuations, and the operating results for any quarter are therefore not necessarily indicative of results that may be otherwise expected for the entire year.

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Our subsidiaries as of December 31, 2021, which are all wholly-owned and are incorporated in the Republic of the Marshall Islands (unless otherwise noted), are listed below.

Vessel Subsidiaries


	Type of
Subsidiary	vessel	Vessel’s name	Built	CBM⁽¹⁾
CJNP LPG Transport LLC	VLGC	Captain John NP	2007	82,000
CNML LPG Transport LLC	VLGC	Captain Nicholas ML	2008	82,000
Comet LPG Transport LLC	VLGC	Comet	2014	84,000
Corsair LPG Transport LLC	VLGC	Corsair⁽²⁾	2014	84,000
Corvette LPG Transport LLC	VLGC	Corvette⁽²⁾	2015	84,000
Dorian Shanghai LPG Transport LLC	VLGC	Cougar	2015	84,000
Concorde LPG Transport LLC	VLGC	Concorde⁽²⁾	2015	84,000
Dorian Houston LPG Transport LLC	VLGC	Cobra	2015	84,000
Dorian Sao Paulo LPG Transport LLC	VLGC	Continental	2015	84,000
Dorian Ulsan LPG Transport LLC	VLGC	Constitution	2015	84,000
Dorian Amsterdam LPG Transport LLC	VLGC	Commodore	2015	84,000
Dorian Dubai LPG Transport LLC	VLGC	Cresques⁽²⁾	2015	84,000
Constellation LPG Transport LLC	VLGC	Constellation	2015	84,000
Dorian Monaco LPG Transport LLC	VLGC	Cheyenne	2015	84,000
Dorian Barcelona LPG Transport LLC	VLGC	Clermont	2015	84,000
Dorian Geneva LPG Transport LLC	VLGC	Cratis	2015	84,000
Dorian Cape Town LPG Transport LLC	VLGC	Chaparral	2015	84,000
Dorian Tokyo LPG Transport LLC	VLGC	Copernicus	2015	84,000
Commander LPG Transport LLC	VLGC	Commander	2015	84,000
Dorian Explorer LPG Transport LLC	VLGC	Challenger	2015	84,000
Dorian Exporter LPG Transport LLC	VLGC	Caravelle	2016	84,000
Dorian Sakura LPG Transport LLC⁽³⁾	VLGC	Hull No. 1755	2023⁽⁴⁾	84,000

Management and Other Subsidiaries



Subsidiary
Dorian LPG Management Corp.
Dorian LPG (USA) LLC (incorporated in USA)
Dorian LPG (UK) Ltd. (incorporated in UK)
Dorian LPG Finance LLC
Occident River Trading Limited (incorporated in UK)
Dorian LPG (DK) ApS (incorporated in Denmark)
Dorian LPG Chartering LLC
Dorian LPG FFAS LLC
CMNL LPG Transport LLC

(1)	CBM: Cubic meters, a standard measure for LPG tanker capacity

(2)	Operated pursuant to a bareboat charter agreement. Refer to Note 8 below for further information.

(3)	Upon delivery, the applicable vessel will be operated pursuant to a bareboat charter agreement. Refer to Note 16 below for further information.

(4)	The applicable vessel is expected to be delivered in calendar year 2023.

COVID-19

Since the beginning of calendar year 2020, the outbreak of the COVID-19 pandemic has negatively affected economic conditions, the supply chain, the labor market, the demand for certain shipped goods regionally as well as globally and may otherwise impact our operations and the operations of our customers and suppliers. Governments and governmental agencies have taken numerous actions in an attempt to mitigate the spread of the COVID-19 virus, including travel bans, quarantines, and other emergency public health measures, and a number of countries implemented lockdown measures. These measures resulted in a significant reduction in global economic activity and extreme volatility in the global financial markets. Though some of these measures were relaxed, certain governments may reinstate similar or other measures in the wake of the spread of the COVID-19 virus and its related variants. If the COVID-19 pandemic continues on a prolonged basis or becomes more severe, including as a result of variants of COVID-19, the adverse impact on the global economy and the shipping industry may deteriorate and our operations and cash flows may be negatively impacted. The extent of COVID-19’s impact on our financial and operational results, which could be material, will depend on the duration and severity of the pandemic, vaccination rates among the population, the effectiveness of COVID-19 vaccines

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against COVID-19 and its variants, and other governmental responses. Any new uncertainties regarding the economic impact of the COVID-19 pandemic may likely to result in market turmoil, which could also negatively impact our business, financial condition and cash flows. Over the course of the pandemic, governments approved large stimulus packages to mitigate the effects of the sudden decline in economic activity caused by the pandemic; however, we cannot predict the extent to which these measures will be sufficient to continue to sustain the business and financial condition of companies in the shipping industry. We have experienced increases in crew wages and related costs, particularly in crew travel and medical costs, as a result of COVID-19.

2. Significant Accounting Policies

The same accounting policies have been followed in these unaudited interim condensed consolidated financial statements as those applied in the preparation of our consolidated audited financial statements for the year ended March 31, 2021 (refer to Note 2 to our consolidated financial statements included in our Annual Report on Form 10-K for the year ended March 31, 2021).

Accounting Pronouncements Not Yet Adopted

In March 2020, the Financial Accounting Standards Board issued ASU No. 2020-04, “Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”).” ASU 2020-04 provides temporary optional expedients and exceptions to the guidance in U.S. GAAP on contract modifications and hedge accounting to ease the financial reporting burdens related to the expected market transition from LIBOR and other interbank offered rates to alternative reference rates. This ASU is effective for adoption at any time between March 12, 2020 and December 31, 2022. We are currently evaluating the impact of this adoption on our consolidated financial statements and related disclosures.

3. Transactions with Related Parties

Dorian (Hellas), S.A.

Dorian (Hellas) S.A. (“DHSA”) formerly provided technical, crew, commercial management, insurance and accounting services to our vessels and had agreements to outsource certain of these services to Eagle Ocean Transport Inc. (“Eagle Ocean Transport”), which is 100% owned by Mr. John C. Hadjipateras, our Chairman, President and Chief Executive Officer.

Dorian LPG (USA) LLC and its subsidiaries entered into an agreement with DHSA, retroactive to July 2014 and superseding an agreement between Dorian LPG (UK) Ltd. and DHSA, for the provision by Dorian LPG (USA) LLC and its subsidiaries of certain chartering and marine operation services to DHSA, for which income was earned and included in “Other income-related parties” totaling less than $0.1 million for both the three months ended December 31, 2021 and 2020 and $0.1 million for both the nine months ended December 31, 2021 and 2020.

As of December 31, 2021, $1.0 million was due from DHSA and included in “Due from related parties” in the unaudited interim condensed consolidated balance sheets. As of March 31, 2021, $1.0 million was due from DHSA and included in “Due from related parties” in the audited consolidated balance sheets.

Helios LPG Pool LLC

On April 1, 2015, Dorian and Phoenix began operations of the Helios Pool, which entered into pool participation agreements for the purpose of establishing and operating, as charterer, under variable rate time charters to be entered into with owners or disponent owners of VLGCs, a commercial pool of VLGCs whereby revenues and expenses are shared. We hold a 50% interest in the Helios Pool as a joint venture with Phoenix and all significant rights and obligations are equally shared by both parties. All profits of the Helios Pool are distributed to the pool participants based on pool points assigned to each vessel as variable charter hire and, as a result, there are no profits available to the equity investors as a share of equity. We have determined that the Helios Pool is a variable interest entity as it does not have sufficient equity at risk. We do not consolidate the Helios Pool because we are not the primary beneficiary and do not have a controlling

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financial interest. In consideration of Accounting Standards Codification (“ASC”) 810-10-50-4e, the significant factors considered and judgments made in determining that the power to direct the activities of the Helios Pool that most significantly impact the entity’s economic performance are shared, in that all significant performance activities which relate to approval of pool policies and strategies related to pool customers and the marketing of the pool for the procurement of customers for the pool vessels, addition of new pool vessels and the pool cost management, require unanimous board consent from a board consisting of two members from each joint venture investor. Further, in accordance with the guidance in ASC 810-10-25-38D, the Company and Phoenix are not related parties as defined in ASC 850 nor are they de facto agents pursuant to ASC 810-10, the power over the significant activities of the Helios Pool is shared, and no party is the primary beneficiary in the Helios Pool, or has a controlling financial interest. As of December 31, 2021, the Helios Pool operated twenty-four VLGCs, including twenty-one vessels from our fleet (including two vessels time chartered-in from related parties) and three Phoenix vessels.

As of December 31, 2021, we had net receivables from the Helios Pool of $67.0 million (net of an amount due to Helios Pool of $0.3 million which is reflected under “Due to related Parties”), including $23.1 million of working capital contributed for the operation of our vessels in the pool (of which $2.2 million was classified as current). As of March 31, 2021, we had net receivables from the Helios Pool of $78.1 million (net of an amount due to Helios Pool of $0.1 million which is reflected under “Due to related Parties”), including $24.2 million of working capital contributed for the operation of our vessels in the pool (of which $1.1 million was classified as current). Our maximum exposure to losses from the pool as of December 31, 2021 is limited to the receivables from the pool. The Helios Pool does not have any third-party debt obligations. The Helios Pool has entered into commercial management agreements with each of Dorian LPG (UK) Ltd. and Phoenix as commercial managers and has appointed both commercial managers as the exclusive commercial managers of pool vessels. Dorian LPG (DK) ApS has assumed the responsibilities of Dorian LPG (UK) Ltd. under these commercial management agreements with the consolidation of our Copenhagen, Denmark and London, United Kingdom offices. Fees for commercial management services earned by Dorian LPG (DK) ApS are included in “Other income-related parties” in the unaudited interim condensed consolidated statement of operations and were $0.5 million for both the three months ended December 31, 2021, and 2020, and $1.6 million and $1.5 million for the nine months ended December 31, 2021, and 2020, respectively. Additionally, we receive a fixed reimbursement of expenses such as costs for security guards and war risk insurance for vessels operating in high risk areas from the Helios Pool, for which we earned $0.4 million and $0.9 million for the three months ended December 31, 2021, and 2020, respectively, and $1.9 million and $2.9 million for the nine months ended December 31, 2021, and 2020, respectively, and are included in “Other revenues, net” in the unaudited interim condensed consolidated statements of operations.

Through our vessel owning subsidiaries, we have chartered vessels to the Helios Pool during the nine months ended December 31, 2021 and 2020. The time charter revenue from the Helios Pool is variable depending upon the net results of the pool, operating days and pool points for each vessel. The Helios Pool enters into voyage and time charters with external parties and receives freight and related revenue and, where applicable, incurs voyage costs such as bunkers, port costs and commissions. At the end of each month, the Helios Pool calculates net pool revenues using gross revenues, less voyage expenses of all pool vessels, less fixed time charter hire for any chartered-in vessels, less the general and administrative expenses of the pool as variable rate time charter hire for the relevant vessel to participants based on pool points (vessel attributes such as cargo carrying capacity, scrubber-equipped, fuel consumption, and speed are taken into consideration) and number of days the vessel participated in the pool in the period. Net pool revenues, less any amounts required for working capital of the Helios Pool, are distributed, to the extent they have been collected from third-party customers of the Helios Pool. We recognize net pool revenues on a monthly basis, when each relevant vessel has participated in the pool during the period and the amount of net pool revenues for the month can be estimated reliably. Revenue earned from the Helios Pool is presented in Note 13.

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4. Deferred Charges, Net

The analysis and movement of deferred charges is presented in the table below:

DORIAN LPG LTD. [LPG] Filings
10-Q	[2022-02-03]
10-Q	[2021-11-03]
10-Q	[2021-08-04]
10-K	[2021-06-02]
10-Q	[2021-02-02]
10-Q	[2020-11-02]
10-Q	[2020-08-04]
10-K	[2020-06-12]
10-Q	[2020-02-05]
10-Q	[2019-10-31]
10-Q	[2019-08-07]
10-K	[2019-05-30]
10-Q	[2019-02-04]
10-Q	[2018-10-31]
10-Q	[2018-08-09]
10-K	[2018-06-28]
10-Q	[2018-02-08]
10-Q	[2017-11-09]
10-Q	[2017-07-31]
10-K	[2017-06-14]
10-Q	[2017-01-30]
10-Q	[2016-10-28]
10-Q	[2016-07-28]
10-K	[2016-05-31]
10-Q	[2016-01-29]
10-Q	[2015-10-30]
10-Q	[2015-08-05]
10-K	[2015-06-04]
F-1	[2014-12-04]
20-F	[2014-07-30]
F-1	[2014-03-07]