DorianG (LPG) Q1 Revenue Drops 26%

Globe and Mail

2 days ago

Key Points
Non-GAAP earnings per share missed analyst expectations by 63.7%, dropping to $0.27 in Q1 FY2026 from $1.26 in Q1 FY2025.
GAAP revenue declined 26.4% to $84.2 million in Q1 FY2026, well below the $100 million estimate, mainly due to lower shipping rates and vessel downtime.
DorianG declared an irregular cash dividend of $0.60 per share in Q1 FY2026, continuing its capital returns despite sharply lower profits.
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DorianG (NYSE:LPG), a leading owner and operator of Very Large Gas Carriers (VLGCs) focused on transporting liquefied petroleum gas (LPG), reported first quarter fiscal 2026 results on July 31, 2025. The company's report revealed significant underperformance compared to Wall Street expectations, driven by sharply lower shipping rates, reduced vessel availability due to drydocking, and increased operating expenses. Adjusted earnings per share (EPS) landed at $0.27, missing the $0.74 analyst target, while GAAP revenue came in at $84.2 million—down by $30.1 million from the prior-year quarter and about $15.8 million below consensus estimates. Overall, DorianG faced a marked downturn in profit and earnings quality, reflecting both industry and company-specific pressures during the period.
Metric Q1 FY26(Three Months Ended June 30, 2025) Q1 Estimate Q1 FY25(Three Months Ended June 30, 2024) Y/Y Change
EPS (Non-GAAP) $0.27 $0.74 $1.26 (78.6%)
Revenue $84.2 million $100.0 million N/A (26.4%)
Adjusted EBITDA $38.6 million $78.0 million (50.6%)
Time Charter Equivalent Rate $39,726 $50,243 (20.9%)
Vessel Operating Expenses $21.9 million $20.5 million 6.8%
Source: Analyst estimates for the quarter provided by FactSet.
Business Overview and Key Success Factors
DorianG operates a modern fleet of 26 Very Large Gas Carriers, specializing in the maritime transport of LPG worldwide. Its vessels primarily serve major energy companies and commodity traders, with exposure to global trade routes and competitive chartering markets. The company's key focus areas include fleet management and modernization, environmental compliance, and strategic partnerships.
Recent business priorities have centered on maintaining a young, fuel-efficient fleet equipped with emission-reducing technology, such as scrubbers and dual-fuel engines. DorianG has worked to optimize vessel performance, comply with tightening environmental rules, and foster close partnerships—most notably, the Helios LPG Pool joint venture for revenue sharing and efficient fleet utilization. Maintaining reliable operations, meeting customer standards, and navigating volatile shipping markets remain critical factors for continued success.
Quarterly Review: Revenue, Expenses, and Key Developments
DorianG saw revenue drop by $30.1 million (down 26.4% from the previous year) as a result of lower time charter equivalent (TCE) rates and fewer available vessel days. TCE is a crucial industry metric that measures average daily revenue per ship, smoothing out volatile voyage results for comparison. In Q1 FY2026, the non-GAAP figure dropped to $39,726 per day, down from $50,243 in Q1 FY2025. Management attributed the decline in revenue generation to "a heavy drydocking schedule as well as the market." Available vessel days fell 7.7%, from 2,260 in Q1 FY2025 to 2,086 in Q1 FY2026, after extensive fleet maintenance and upgrades.
General and administrative (G&A) expenses surged 62.2%, or $6.5 million year over year, primarily due to the timing and larger size of employee cash bonuses. Vessel operating expenses rose 7.0% to $21.9 million, with the increase arising largely from non-capitalizable costs associated with drydocking and planned maintenance. Depreciation and amortization edged higher by $1.2 million, in line with routine vessel aging and ongoing investments in the fleet.
On the market side, DorianG's results were affected by sharply lower freight rates. The Baltic Exchange LPG Index—a widely followed industry rate benchmark—averaged $63.50 per metric ton in Q1 FY2026, down from $72.67 in Q1 FY2025. Freight rate volatility, combined with rerouted LPG trade flows due to ongoing U.S.-China tariff adjustments and Middle East conflict, created additional uncertainty. Management noted swings in the Baltic index during Q2 2025, with intra-period rates ranging from $30 to $90 per ton. These conditions contributed to the year-over-year drop in TCE, which fell 20.9% and put significant pressure on operating margins and net income.
DorianG has sustained its focus on environmental upgrades and compliance investments. Its fleet now includes 20 ECO-design VLGCs and 5 dual-fuel vessels, and two VLGCs have been upgraded to carry ammonia cargo as of June 30, 2025. The company completed fleet drydockings to install energy-saving devices, retrofit cargo conversion capability, and ensure alignment with upcoming International Maritime Organization greenhouse gas standards.
Strategic and financial activities continued as well. The Helios Pool partnership, representing approximately 97% of DorianG's revenues for FY2025, remains central to its business model. DorianG declared an irregular cash dividend of $0.60 per share, totaling $25.6 million, as part of its capital return strategy to shareholders. The dividend, declared in Q1 FY2026, is payable on or about August 27, 2025, to shareholders of record as of August 12, 2025. Cash and equivalents at quarter end stood at $277.9 million as of June 30, 2025, down from the prior quarter. The orderbook for new VLGCs worldwide now equals 28.2% of the global fleet as of July 2025, signaling ongoing competitive pressure and potential supply growth through 2029.
No new long-term customer contracts or major partnership changes were disclosed this quarter, and revenue continued to rely mainly on the Helios Pool and spot charter exposure. The company's main focus remains on operational efficiency, cost control, and execution of its significant drydock and upgrade program, while navigating competitive market dynamics and regulatory changes.
Looking Ahead: Guidance, Strategy, and Market Signals
Management did not offer formal, quantitative financial guidance for the next quarter or full year. While the CEO referenced "strong rates supporting our positive outlook" for bookings early in Q2 FY2026; however, this was not supported by specific targets or forward estimates.
In the coming quarters, investors should monitor DorianG's capacity to keep costs stable and manage scheduled drydockings, which will continue to affect vessel availability and day rates. Developments in global LPG trade—especially between the United States, China, and India—will have substantial impact on shipping demand, freight rates, and the company's top-line performance. Any policy shifts or evolutions in the speed and scale of new vessel deliveries could also reshape competitive dynamics. Despite adverse financial results, management maintained its practice of returning capital to shareholders, but the Board retains discretion to increase, decrease, or suspend dividends based on market and company outlook.
The quarterly dividend was set at $0.60 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
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