John Hadjipateras - Chief Executive Officer John Lycouris - Chief Executive Officer, Dorian LPG (USA) LLC Ted Young - Chief Financial Officer

Noah Parquet - JPMorgan Mike Webber - Wells Fargo Spiro Dounis - UBS

Greetings and welcome to the Dorian LPG Third Quarter 2016 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. I would now like to turn the conference over to Ted Young, Chief Financial Officer. Thank you. Mr. Young, please go ahead.

Thank you, operator. Good morning. Thank you all for joining us for our third quarter 2016 results conference call. With me today are John Hadjipateras, Chairman and CEO of Dorian LPG Limited; and John Lycouris, Chief Executive Officer of Dorian LPG USA. As a reminder this conference call, webcast, and replay of this call will be available through February 5, 2016. Many of our remarks today contain forward-looking statements based on current expectations. These statements may often be identified with words such as expect, anticipate, believe or similar indications of future expectations. Although we believe that such forward-looking statements are reasonable, we cannot assure you that any forward-looking statements will prove to be correct. These forward-looking statements are subject to known and unknown risks and uncertainties and other factors as well as general economic conditions. Should one or more of these risks or uncertainties materialize or should underlying assumptions or estimates prove to be incorrect, actual results may vary materially from those we express today. Additionally, let me refer to you to our third quarter 2016 results filed this morning with the SEC on Form 10-Q, where you’ll find risk factors that could cause actual results to differ materially from those forward-looking statements. With that, I’ll turn over the call to John Hadjipateras.

Good morning and thank you for joining us for our third quarter 2016 financial results. I will provide a brief update on our operating performance in Q3 before handing the call to Ted to review our financials. Ted will then pass the call top John Lycouris, who will update you on our newbuilding program and to discuss the broader market. In our third fiscal quarter we had taken delivery of seven ships, the Clermont, Cheyenne, Cratis, Commander, Chaparral, Copernicus and Challenger. At the beginning of the last calendar year we owned five VLGCs. At the mid-year mark end, at the end of June, we owned nine VLGCs. Our fleet now comprises 21 owned VLGCs of which 18 have been built in 2014 and 2015 making Dorian the leader owner of ECO VLGCs in the world. We are partners in the Helios LPG pool where the fleet currently comprises 21 spot VLGCs including one on a one year time charter. 17 are owned by the company and four are owned by Phoenix Tankers, a subsidiary of Mitsui OSK. Outside the pool, we have four VLGCs on time charters of more than two years duration. Our chartering strategy continues to be opportunistic and the strategic employment of our vessels to both the spot and period markets. We have historically been biased towards time charters but we also recognize the importance of taking advantage of a strong market to capture the best possible risk adjusted return on our assets. For the quarter ended December 31, 2015, our spot VLGC utilization was 93% and our overall VLGCs utilization rate was 95%. As a reminder, we calculate fleet utilization as defined in our filings by dividing our total operating days in a period by the total available days in that period. Finally, in accordance with our previously authorized share repurchase program, the company repurchased approximately 6 million worth of LPG shares or 481,231 shares at an average price of $12.10 in the third quarter. The company now has 89.9 million remaining on its authorization. We remain committed to returning cash to our investors and our board continues to consider our dividend policy as our cash position builds. We continue to review our financial position and will determine the most appropriate capital allocation strategy that would best serve our shareholders and the company's strategic flexibility. That includes the weighing of the relative benefits of share repurchase, dividends or accumulating capital for strategic purposes. You should expect us to be opportunistic with our share buyback and to weigh this and other options for delivering value to our shareholders. We certainly see an interesting arbitrage between the value of our vessels and the price of our stock in the market. Let me now hand over the call to Ted who will discuss the financial results of the quarter.

Thank you, John. The quarter's results reflected a strong freight market, a high vessel utilization, the entry of seven newbuildings into service and good management of our costs. Before I move on to discuss the results for the year and the quarter, I would like to remind you that our business should be viewed from a long term perspective. As a reminder we are affected by the seasonality of the market and it's important to understand how this seasonality may affect our quarterly financial results. The LPG shipping market is typically stronger in the spring and summer in preparation for increased consumption of propane and butane for heating during the Northern Hemisphere winter. For the quarter ended December 31, 2015, we reported total revenues of $93.3 million, representing charter hire and voyage freight revenue earned for our VLGCs and our one pressurized vessel. As we initially described last quarter, we reported results for the Helios LPG pool which commenced operations on April 1, 2015, as part of our total revenues. We report our share of the Helios results as net pool revenues on our income statements which represents our percentage participation in the pool revenues less pool voyage expenses and pool general and administrative expenses. Our share of net pool revenues for the quarter was $66 million. Time charter equivalent revenues per day across all our VLGCs including those in the Helios pool, managed roughly 58,000, while our spot VLGCs including those in the pool earned over $65,000 per day for the quarter. Our voyage expenses for the quarter were approximately $4.3 million and mainly related to bunker cost of $3 million. While bunker prices continue to remain low in the current oil price environment, we are also benefitting from the [steam] [ph] performance characteristics of our ECO ships which are performing ahead of our expectations. Our vessel operating expenses for the entire fleet were approximately $14.3 million or $8180 per vessel per calendar day, which is calculated by divining the vessel operating expenses by calendar days for the relevant time period that our fleet was owned. Focusing on our VLGCs only vessel operating expenses, we operated these ships at an average cost of $8,324 per day which included our investment in training officers for future deliveries of approximately $557,000 for the quarter. We expect these training costs to ramp down significantly going forward as we have substantially completed this process but we continue to recruit and train officers and crew in order to ensure regular home leave for our seafarers. Adjusting for that investment and training, the daily OpEx for our VLGCs amounted to approximately $7,980 a day which is a very good result. Depreciation and amortization was approximately $13.5 million for the quarter ended December 31 and it relates mainly to depreciation expense for our operating vessels. General and administrative expenses for the three months ended December 31, 2015 were $7.5 million and were comprised of $2.5 million of salaries and benefits, $1.4 million of cost related to non-capitalizable items incurred prior to delivery of vessels that delivered during the quarter, principally pre-positioning crew several weeks in advance of the delivery of the vessel, $1.3 million of stock-based compensation, $800,000 of professional fees and $1.5 million of other G&A expenses. I would note that our professional fees were somewhat elevated this quarter because of the increased level of corporate and capital markets activity. Excluding the non-cash comp expense, we incurred approximately $6.2 million of cash G&A expense for the quarter. Our year-to-date, that is for the nine months, our G&A excluding non-cash comp expense was $17 million. We previously disclosed that nearly $3 million of that amount relates to cost incurred prior to vessel delivery that cannot be capitalized. Thus we would expect our cash G&A to typically be in the range of $4.5 million per quarter. Our reported interest and finance cost for the quarter was $4.6 million, which was comprised of interest expense on our debt, amortization of financing costs and other financing expenses of $5.7 million, offset by capitalized interest of $1.1 million. The $5.4 million gain on derivatives was comprised of an unrealized gain of $7.4 million from the changes in the fair value of the interest rate swaps and a realized loss of $2 million. The unrealized gain was principally the result of favorable interest rates movement during the quarter. We currently have approximately 66% of our new debt facility hedged and this percentage will increase to over 70% by the end of the hedge period as our bullet hedges represent a greater percentage of our total exposure. We are continuing to consider entering into additional interest rate hedging transactions. Overall, for the quarter we reported a net income of $54.7 million or $0.97 a share. Our adjusted EBITDA as defined in our filings similarly benefitted as we reported $68.7 million of adjusted EBITDA for the quarter. We will see these earnings convert into cash in the coming months, particularly those related to [indiscernible] which have a somewhat longer collection cycle. During the quarter we also repaid $10.6 million of bank debt under our two bank facilities. We finished the quarter on December 31 with $22 million in unrestricted cash. Looking ahead, on a fully drawn basis we expect our annual principal amortization under the 2015 facility to be roughly $3.1 million per vessel per year. During the quarter the company repurchased $5.8 million worth of stock bringing our total repurchases under the stock buyback plan to $10.1 million. We have remained focused on our operating our fleet safely and cost effectively and ensuring that we have a balance sheet that allows us to operate our business in all economic climates. Thus we are pleased that we carry a prudent level of leverage and that our business continues to generate good earnings and cash flow. With that I will turn it over to John Lycouris.

Thank you, Ted. As John reported, Dorian LPG took delivery of seven ECO newbuildings during the last calendar quarter and the fleet now stands at 21 VLGC vessels. All shipping yards have performed in schedule with respect to vessel deliveries. These deliveries have gone smoothly with crew being positioned and trained on schedule at our site offices by our site and newbuilding teams. All vessels have completed gas trials in short order after delivery and entered commercial service by promptly entering the spot market via the Helios LPG pool. One of the newbuilding vessels upon completion of the gas trials entered into a five-year time charter to a major Asia oil company. We believe our customers continue to benefit from the competitive advantages of the Dorian LPG ECO VLGCs and the efficient and smooth integration of these newly delivered vessels into our fleet. Global liquefied petroleum gas export volumes for the calendar 2015 reached 80 million metric tons, an 11% increase over the previous year. U.S. LPG exports alone reached a record of nearly 21 million metric tons which is a 50% increase over the previous year. The U.S. became the largest LPG exporter in the world accounting for 25% of the global seaborne export volumes that were shipped to Central and South America, Asia, Europe and the Mediterranean at a share of about 43%, 29% and 26% respectively. The strong LPG export volumes from the U.S. Gulf, in particular large cargo movements on VLGCs vessels from west to east have increased ton miles for the segment Dorian LPG has focused and has generally supported shipping demand for VLGCs vessels. Other LPG exporting regions have shown a growth in 2015 and have contributed to a generally stronger both the freight market we sell to and strong utilizations and freight rates seen by the VLGC vessels. Propane and butane prices have followed crude oil prices downward, making LPG attractive not only to the retail domestic markets but also to the petrochemical industries around the world. Propane prices in the U.S. Gulf decline along with crude oil and remained for most of the year below 45% of the price of WTI crude, maintaining propane to naphtha spread in northwest Europe in favor of propane. U.S. Gulf LPG inventories were recently reported at about $90 million with the majority of the products located in the Gulf Coast had three area. We believe this is a result of increases in storage capacity for the export terminals and for the petrochemical plant developments in that region. As reported by Enterprise Product Partners, the U.S. Gulf [indiscernible] increased annual capacity by about 5.5 million tons in late '15 and beginning of 2016 for a total of about $14 million tons capacity. We targeted terminal export about 5.5 million tons in 2015 and the Sunoco terminal followed by about 3.9 million tons of exports. On the U.S. east coast, the Sunoco/Marcus Hook terminal started with an export of about 1.1 million tons for the year and the U.S. west coast, the Petrogas terminal at Ferndale Washington had export of about 550,000 tons. The continuing U.S. LPG export capacity growth is evident with the recent enterprise expansion, we expected Marcus Hook Mariner East export terminal which is commencing in February 2016, we expect the Petrogas terminal capacity increase of 350,000 ton during 2016 and the Phillips 66 terminal commencement of 4.4 million tons annual capacity at Freeport, Texas, which is expected to come in line on fourth quarter of 2016. We therefore expect U.S. LPG export volumes may reach higher levels in 2016 which would support additional ship supply and a reasonably robust freight rate market environment for the sector. We continue to see record LPG imports into China in the current and next month, which is February of 2016 and likely -- this would likely confirm that this country will become the largest importer of LPG in the east during 2016. To summarize, we continue to see LPG export growth which will support the fleet growth and establish LPG as a mainstream fuel and feedstock to the global energy markets in the world economy. Thank you.

Thank you, John. So we are ready to question. Operator, could you please open it up for questions.

[Operator Instructions] Our first question comes from the line of Noah Parquet with JPMorgan. Please proceed with your questions.

I just wanted to ask a little bit about your chartering strategy and your comfort level with your spot exposure. I mean are you still looking at long-term charters that you had with the mix? What kind of liquidity for three plus year charters are you seeing? Some color there would be helpful?

Thank you, Noah. We are happy with our mix at the moment because the spot market is higher than the period market. We continue to be looking for time charters and when and if we see them coming we kind of -- as you know we booked one in the last quarter of the calendar year 2015, the five-year charter. We are engaged in discussions with various charters. There is still liquidity in the market, there is enquiry and we continue to be opportunistic about going from spot to period and vice versa.

Okay. And are you able to give any guidance in your bookings to date in spot fleet for the quarter?

The bookings to date -- for this quarter you mean?

Yes.

In line with the market.

I think if you look at the market we are very much in line with that.

Thank you. And our next question comes from the line of Mike Webber with Wells Fargo. Please proceed with your questions.

I just wanted to start off with another question around uses of capital, obviously, you know ongoing theme since really the summer has been around how you guys eventually deploy the cash generation from the fleet that's full delivered now or getting very close. And curious how the current weakness in the market and the relative yield of your competitors kind of impact your though process around [indiscernible] by that and those kinds of solutions. And then at some point it comes down to a decision around whether the current weakness is transitory or longer term in nature, right. I am just curious as to how to guys think about or go about making that kind of decision.

Mike, are you talking about the weakness in the stock price or weakness in the market, in the shipping market?

The weakness in the equity market.

The equity market. Okay.

Or the energy product chain.

The whole energy, yes, yes. I think we are bundled into the energy and despite the fact that our fundamentals, our business fundamentals are very strong and continue to be ahead of our expectations, our price, our sell price has suffered along with everybody else's. So I think Mike the best thing I can say to this is, consistent with our past practice we continue to focus on the fundamentals of our business. I think that is a way that we can deliver value to our shareholders. Now whether we can -- when we can return money to our shareholders by way of dividends and or buybacks, that is something that we continue to and actually now we will be looking at more closely because as you observe, we are in the phase now of actually collecting money for having almost completed the build out of our fleet. So we are looking at the fundamentals of our business and we are conscious -- our board is conscious of our shareholder activities and we will be either be doing a dividend or doing a buyback. At the moment the values are very compelling on the buyback front. I think that is the main sort of takeaway from the weakness in the stock market that we see.

Yes. No, that kind of explains. So obviously it's a tough environment in that regard, outside of where you guys are actually earnings. But around those fundamentals, the real overhang around fundamentals is going to be the '16 order book and how this ends up weighing on rate. So I am just curious, I know you guys have pretty deeper models around this but how do you see that getting layered in, maybe from a sector wide utilization perspective. When you see start seeing you are having a tangible impact I guess on sector wide utilization, is it a Q2 event or do you think it could be sometime a bit beyond that.

Yes, we have been surprised to the upside and I will let John Lycouris tell you more specifically how and what we think going forward for the next few quarters.

Hi, Mike. As I said on the text before, we have been surprised for U.S. Gulf exports. It appears that there is going to be at least 5 million to 10 million tons more of LPG exported out of the United States. We have seen West Africa, Algeria, Northwest Europe, produce additional tons. And I believe that everybody is expecting Iran to come into the market strongly this year. So we will see abundant supply of LPG. You will need shipping to take care of that abundance of LPG and the pricing of LPG now this has made it the most desirable source of energy for India, for China, for all these developing countries that have put LPG as one of their main source of energy.

Thanks, John. Just one more from me and I will turn it over. And this is for Ted, during your prepared remarks I think you referenced an amortization figure for the [suite] [ph] that I believe you said was around $3 million to $4 million. I just want to double check that I heard that correctly. And then it terms of that amortization profile, is that relatively flat over the next several years and can you remind us when the balloon is on that facility.

Yes. It's $3.1 million, Mike, per vessel per year. So, yes, that’s the way -- and remember that’s on the newbuilds. It's 18 vessels, so that’s about -- on 18 vessels it would be about $56 million a year. That profile is flat for quite a while. The way the facility works is that we have got a seven year initial or about six years remaining under the commercial tranche of our loan. And then the other three which are supported by the Korean export agencies are 12 years. So aside from a refinancing event that we would expect at year seven, the facility doesn’t really -- doesn’t have a balloon per say because the Korean export facility actually is a flat amortization down to zero.

[Operator Instructions] And our next question comes from the line of Spiro Dounis with UBS. Please proceed with your question.

Just wanted to start off with a quick one on cost metrics. Continued to be surprised, I think over the last few quarters it's definitely come in lower than we have expected anyway. And I know you have given guidance in the past on cash breakevens of around 23,500 to 24,000 a day for these vessels. Just wondering that in connection with the amortization you mentioned before, do those numbers still hold or that is actually little lower these days.

Well, there are currency factors here at play too. But Ted would give you a little bit of an explanation on that.

Look, I think overall Spiro, over the longer term -- look historically vessel OpEx costs have continued to go up at around 2%. So we tend to sort of stick by original guidance of 24,000 plus or minus per day in terms of cash breakeven. The benefit that we have seen is that these newer vessels clearly are operating at a lower cost. Some of that is crude cost, other major saving factor is probably spares and repairs and maintenance. Repairs and maintenance are pretty expected given where we are in the life of these vessels. Spares and also lubes, they just seem to be more efficient and so we are expecting some long-term benefit from that. But nonetheless, we are also just, as John kind of points out, there are other factors at play that as we think about over the long term we kind of stick to our original guidance.

Got it. Perfect. And just one last, maybe big picture question. So sorry for not giving any breathing room here before taking the delivery of last vessel but I guess, what's next for Dorian. I know NMLP was once considered, I am pretty sure that’s off the table for now. But obviously you are going to be returning cash to shareholders like you said. Just wondering if you see any opportunities out there that maybe look interesting right now just given the carnage in the energy space.

Yes. There is a lot of interesting things. At the moment we are securing business. We continue to focus on securing our own business but you are right, we are now slowly turning to looking around at opportunities. As you know from time to time we have been looking at consolidation which we still are alive to possibilities and we are looking at other things as well. And you will be the first to know when we get in close to something.

Perfect. And just as a follow up on that real quick. As far as consolidation goes, I mean your preference, obviously you are a VLGC owner, any interest in the smaller classes. I am guessing probably not, not as much.

Well, yes, there is interest. We are looking at other classes because as pricing changes other things become interesting as well. Right. So I think that the relative pricing of everything we take into consideration. We are just very hot on the LPG story. We just think that the LPG has a lot -- a very strong future and an expanding future and I think it's going to make inroads as a fuel. And I think that there will be a lot of opportunities out there in the shipping of it and in the distribution of it. So this is where we kind of -- that’s what we wake up and go to sleep with.

Your next question comes from the line of Erik Stavseth with Arctic Securities. Please proceed with your questions. Erik your line is live.

Well, it looks like Erik [got off] [ph]. So thank you. I am mindful that a lot of you are calling from Europe so we are going to let you start your weekend with those of you who are and especially those in Norway who want to go up to their cabins. Thank you very much for calling in and talk to you next time.

Thank you. Ladies and gentlemen, this concludes the conference. You may disconnect your lines at this time. Thank you for your participation.