agenda - s21.q4cdn.coms21.q4cdn.com/513962416/files/doc_presentations/... · statements are free...
Post on 31-May-2020
4 Views
Preview:
TRANSCRIPT
Agenda
Page
[ C L I E N T N A M E ]
Presentation2 Private and Confidential
December, 2014
Investor Deck Report
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.
3
Investment Highlights Largest ECO VLGC fleet, VLGCs represent critical link in the LPG supply chain
Fleet
3 Modern VLGCs, 2 ECO VLGCs, 1 pressurized LPG carrier 17 ECO VLGCs (Delivering Q1 2015 – Q1 2016)
Management Fully Integrated, In-house Commercial & Technical management
Chartering strategy Balanced mix of time charters and spot exposure, targeting high quality counterparties
Key Counterparties
Global presence Stamford, CT (Headquarters), London, UK and Piraeus, Greece
Entry into LPG 2002
Overview:
VLGC Vessel Count
5
20 22
Current Fleet 2015 2016
Average Age (Years)
+15
+2
End of 2014 End of 2015
3.6 1.6
4
Key Investment Highlights
US shale revolution has created a fundamental shift in trade flows
Rapid LPG growth creating tight supply-demand dynamics
VLGCs are a critical link in the global LPG supply chain
Significant built-in growth with the youngest and largest ECO VLGC fleet
Strong balance sheet ensures flexibility and ability to capitalize on growth opportunities
Integrated technical and commercial management with proven track record
Alignment of management and shareholder interest and significant founder investment
1
2
3
4
5
6
7
5
! 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 2006-2008
! 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
Significant market presence with 22 Modern VLGCs and targeting further consolidation
Overview Timeline
Source: Dorian LPG
The Evolution of Dorian LPG
July 2013: Ordered 3 ECO VLGCs at
HHI
1906: Family purchased first steamship, the Marietta
Ralli
1980s: Completed tonnage renewal
program
1959: John C. Hadjipateras &
Sons entered the tanker market
2011: Dorian LPG won Statoil’s Working Safely with Suppliers
Award for ‘Best Shipping Supplier’
2002-2003: Acquisition of small pressurized LPG
carriers 1973: Dorian
(Hellas) established
1950s: Orient Mid-East Lines
pioneered sailings from Great Lakes to
Middle East
2005-2006: Placed order for 4xVLGCs at HHI,
Korea
November 2013: Acquired 13 VLGC
NBs from STNG February 2014:
Exercised option for 3 additional VLGCs
May 2014: Successful IPO on
the NYSE July 2014: Delivery of NB VLGC “Comet” at
HHI
London, UK
Offices Headquarters
Stamford, USA
Piraeus, Greece
Sep. 2014: Delivery of NB VLGC “Corsair”
at HHI
6
LPG VLGCs
By-product of natural gas and oil production
Avoids harmful or potentially
dangerous waste Pressure Gas Carriers
(<11,500cbm)
Semi-refrigerated Gas Carriers
(5-23,000cbm)
Fully refrigerated Gas Carriers
(15-84,000cbm)
U.S. LPG exports have created secular supply dynamics -
centered around two long haul
seaborne trade routes
The largest LPG carriers are best
suited for long haul trades
Competitive Petchem feedstock
Source: ExceptionalEnergy.com
Autogas is the most accepted alternative auto
fuel
20% less CO2 than heating oil and 50%
less than coal
Improves local air quality
7
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
Oil production and refining (~40%)
Gas production (~60%)
VLGCs
Cooking / Heating
Autogas
Chemical
Industrial
Other
Refinery
Source: Poten & Partners
Ret
ail m
arke
t 60
%
Bul
k m
arke
t 40
%
The most cost effective means of long haul LPG transportation
8
VLGC Day Rates at Healthy Levels
Baltic VLGC Rate:
Day
rate
in U
SD/d
ay
" Increased YOY LPG production and favorable U.S. pricing vs. Middle East pricing
" Rapid increase in VLGC liftings from the USGC (Targa and Enterprise)
" Increasing arbitrage movements West to East resulting in higher tonne-mile demand
" Demand from India and China absorbing incremental LPG tonnage
Key Drivers of Rate Strength
-
20,000
40,000
60,000
80,000
100,000
120,000
140,000
160,000 VLGC Spot TCE
6-Month Trailing Ave. TCE
3-Year Trailing Ave. TCE
9
0
20
40
60
80
2012 2013 2014 2015 2016 2017
VLGC lifting equivalent, per month
US Supply Growth Making LPG Increasingly Competitive
Source: EIA, Bloomberg, Poten & Partners
US LPG Export Terminal Capacity
*Primary VLGC exporting terminals, beyond 2015
New Price Competition
0
10
20
30
2011 2012 2013 2014 2015 2016 2017
mm t/y
Enterprise – Houston* Targa - Galena Park* P66 – Freeport* Sunoco – Marcus Hook* Sunoco – Nederland* Occidental – Ingleside* Trafigura – Corpus Christi Petrogas – Ferndale* DCP - Chesapeake Sea 3 - Newington
" 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
" US residential and petchem demand should be
offset by increasing use of ethane and natural gas
VLGC Equivalent Liftings per Month
10
US LPG Supply Surging with flat domestic demand
Asian Demand growing (mm Tonnes)
Source: IHS, China, TPH
" US to become the worlds single largest LPG exporting nation
" Competitive Pricing:
" linked to NGL supply demand dynamics not oil
" Asian LPG demand could absorb excess US supply
11
Surge in Chinese PDH Can be Supported by US Exports
" Favorable US LPG pricing linked to associated NGL supply-demand; not just oil production
" PDH importers require high purity propane, best sourced from the US or Middle East
" Panama Canal expansion to reduce US-Asia voyage time by 20 days
Note: Propylene production capacity to VLGC Equivalents of Propane demand: 1 tonne of propylene yields 1.18 tonnes of propane; 1 VLGC equivalent is 44,000 tonnes of propane Source: ICIS, Poten, CNBC.com; 4/10/14, “Riding shale boom, US to become major LPG supplier to China”
93
124 140
153
271
0
2,000
4,000
6,000
8,000
10,000
12,000
0
50
100
150
200
250
300
End 2014 End 2015 End 2016 End 2017 Planned / pending
approvals
New Cumulative Chinese PDH Propane Feedstock
New Cumulative Chinese PDH Propylene Production
Propylene Capacity (000 tonnes)
VLGC Equivalents
-20
0
20
40
60
Jan-10 Jan-11 Jan-12 Jan-13 Jan-14
PDH Margin - US Propane PDH Margin - Global Propane
PDH Margins - Historical Propane Feedstock Required
" Surge in Chinese PDH Supported by US Exports
" Sinopec, Tianjin Bohai, Oriental Energy, Fujain Meide, and Shaoxing Sanyuan Petrochemical have all signed long term supply contracts to US export terminals.
Margin %
12
Fleet Built at World Class Korean Shipyards
Source: Clarksons
VLGC Newbuild Deliveries by Shipyard 2006-2016
" 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 8 vessels at HHI since 2004 and maintains a strong relationship
*
60%
7%
7%
13%
13%
HHI is the most active and experienced yard in the design and construction
of gas carriers
13
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
" Awarded by Statoil to Dorian for outstanding service and performance and steadfast commitment to HSE over 30 other shipping service providers
Working Safely with Suppliers Award
14
2014 2015 2016
Current fleet: Shipyard Sister Vessels
Charter expiration 1H’14 2H’14 1H’15 2H’15 1H’16 2H’16
Captain Nicholas ML A -
Captain John NP A -
Captain Markos NL A Q3 2019
Grendon - -
Comet B Jul’14
Corsair B Sep’14
Firm Newbuildings:
Corvette B Jan’15
Cougar B Q2’15
Cobra B Q2’15
Continental B Q2’15
Concorde B Q2’15
Constitution B Q3’15
Commodore B Q3’15
Cresques C Q3’15
Constellation B Q3’15
Cheyenne B Q3’15
Cratis B Q4’15
Clermont B Q4’15
Chaparral C Q4’15
Commander C Q4’15
Copernicus B Q4’15
Challenger B Q1’16
Caravel B Q1’16
Dorian LPG Fleet Overview
Overview of Vessel Employment Overview of Chartering Strategy
" 4 R Customers and Shareholders:
" Return on capital: mix of long term and spot charters
" Regular employment: fleet utilization
" Risk management: strong counterparty
" Responsive: to customers and the market
Statoil Spot Market
Spot market
Shell, Q3 2014 – Q2 2019
Statoil Shell, Q3 2014 – Q3 2019
Newbuilding vessels
open to spot market
Legend
Current charters
Available days Delivery date
Future charters
Spot Market
Spot Market
15
Fleet Designed to Meet Tomorrow’s Regulations
ECA: Emission Control Areas Source: International Maritime Organization Note: Regulations established to limit SOx and particulate matter emissions
3 17 2
Existing Scrubber Ready Scrubber -Already Declared
Dorian LPG will have the youngest and most modern fleet of ECO VLGCs
Outside an ECA Inside an ECA
0.50% m/m on and after 1 January 2020
0.10% m/m on and after 1 January 2015
16
44.0 46.1
36.5 38.4
25
30
35
40
45
50
55
ECO-Vessels Represent Significant Additional Earnings Potential
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)
Heavy Fuel Oil (HFO) Marine Gas Oil (MGO)
Average daily fuel savings of >$3,0001
Optimized Hull 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
Traditional VLGC Dorian ME-G type NB (ECO)
-17% MAN B&W’s New G-Type Engine
" Electronic Engine Control " De-rated, Long Stroke Design " Improved Propeller Design
Low Friction, Self Polishing Paint
-17%
Fuel Oil Consumption Analysis
Scrubber / Scrubber Ready
17
17
Recent Strategic Business Development Initiatives ! On July 31, 2014, Dorian LPG announced a heads of agreement in principle with Phoenix Tankers Ltd., one of the foremost VLGC operations in Asia, to form a new VLGC pool which should:
" Expand the Company’s global presence and strengthen its position in the increasingly important Eastern LPG market
" Accelerate Dorian LPG’s entry into the lucrative Indian trade
! On July 25, 2014, the Company announced a Memorandum of Understanding with HNA Group Ltd., one of the largest privately held Chinese companies. The key benefits of this relationship are:
" Enhancement of Dorian LPG’s access to the Chinese market and Chinese LPG importers, significantly improving its access in this growing market
" Development of relationships with Chinese end users to deepen end market positioning and knowledge
! Increase overall fleet utilization
18
Fleet of 22 VLGCs with 19 ECO newbuilds contracted for delivery 2014–16
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 dropdowns
Strong, moderately leveraged balance sheet and stable earnings create opportunities to fund growth or pay dividends
Multiple Pillars for Creating Shareholder Value
19
Key Investment Highlights
US shale revolution has created a fundamental shift in trade flows
Rapid LPG growth creating tight supply-demand dynamics
VLGCs are a critical link in the global LPG supply chain
Significant built-in growth with the youngest and largest ECO VLGC fleet
Strong balance sheet ensures flexibility and ability to capitalize on growth opportunities
Integrated technical and commercial management with proven track record
Alignment of management and shareholder interest and significant founder investment
1
2
3
4
5
6
7
20
Statement of Operations (in USD)
Statement of Operations Six Months Ended September 30, 2014
(Unaudited)
Nine Months Ended March 31, 2014
(Audited)
Revenues $ 36,212,051 $ 29,633,700
Voyage expenses 7,143,558 6,670,971
Vessel operating expenses 8,670,968 8,394,959
Management fees – related party 1,125,000 3,122,356
General and administrative expenses 5,094,724 6,620,372
EBITDA 14,177,801 4,825,042
Depreciation and amortization 5,501,080 433,674
Operating income 8,676,721 4,391,368
Other income/(loss), net (1,240,795) (1,557,525)
Net income $ 7,435,926
$ 2,833,843
Time charter equivalent rate (1) $ 42,560 $ 24,402
Daily vessel operating expenses (2) $ 10,771 $ 8,531
Adjusted EBITDA (3) $ 14,965,356 $ 12,137,422
(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.
21
Balance Sheet and Cash Flows (in USD)
Balance Sheet September 30, 2014 Unaudited)
March 31, 2014 (Audited)
Cash and cash equivalents $ 283,013,780 $ 279,131,795
Restricted cash, current — 30,948,702
Restricted cash, non-current 4,510,000 4,500,000
Total assets 1,000,601,014 840,245,766
Current portion of long-term debt 9,612,000 9,612,000
Long-term debt – net of current portion 114,300,500 119,106,500
Total liabilities 146,512,239 148,046,334
Total shareholders' equity
$
854,088,775
$
692,199,432 Cash Flows Six Months Ended
September 30, 2014 (Unaudited)
Nine Months Ended March 31, 2014
(Audited)
Net income $ 7,435,926 $ 2,833,843
Adjustments 5,881,491 4,798,718
Changes in operating assets and liabilities (5,400,307) (387,139)
Net cash provided by operating activities 7,917,110 7,236,422
Net cash used in investing activities (153,317,519) (221,434,724)
Net cash provided by financing activities 149,635,260 493,322,093
Effects of exchange rates on cash and cash equivalents (352,866) 8,004
Net increase in cash and cash equivalents $ 3,881,985 $ 279,131,795
www.dorianlpg.com
Investor Deck Report
top related