Hormuz closure fuels record quarter for Stamford shipping company

Dorian LPG Ltd., which owns and operates a fleet of 25 tankers that carry propane and butane around the world, reported net income of $138.3 million for the three months ended June 30, up from $10.1 million a year earlier, according to its quarterly earnings release. Revenue more than doubled, to $187.9 million from $84.2 million.

About the role

Dorian doesn't own the propane or butane it transports. Instead, it earns revenue by leasing its vessels to customers at daily charter rates, which rose sharply during the quarter.

Financial performance

• Net income: $138.3 million for the quarter ended June 30, up from $10.1 million a year earlier
• Revenue: $187.9 million, more than double from $84.2 million
• Average daily charter rate per vessel: $75,926 during the quarter, up from $39,726 a year earlier
• Shipping rate per ton of gas roughly doubled during the quarter

Market drivers

• Blockage of the Strait of Hormuz has snarled global energy markets and driven up oil prices
• Asian buyers replaced Middle Eastern supplies with cargoes from the U.S. Gulf Coast
• Longer voyages mean each tanker can complete fewer voyages, tightening vessel supply
• Higher insurance premiums for war risk, costlier fuel, and shipowners' reluctance to send crews into the Arabian Gulf have added to the squeeze

Outlook

The company warned that the current market may prove temporary, telling investors there is no assurance today's unusually high rates will persist once shipping routes normalize.