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CalPERS opens new position in Dorian LPG

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CalPERS adds new position in Dorian LPG

CalPERS added a stake in Dorian LPG (LPG), which accounted for 0.02% of the pension fund’s total portfolio for the quarter ending in December.

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Overview of Dorian LPG

Dorian LPG is a liquefied petroleum gas shipping company and an owner and operator of modern VLGCs (Very Large Gas Carriers). It is a Marshall Islands corporation headquartered in the United States. Dorian LPG currently owns and operates six modern VLGCs and one pressurized LPG vessel.

A release on the company’s website noted that following the completion of its newbuilding program and delivery of an additional 17 new fuel-efficient ECO design VLGCs expected between January 2015 and January 2016, the company will be one of the world’s largest owners of VLGCs.

Dorian LPG saw an initial public offering in May 2014. Its main shareholders include Scorpio Tankers (STNG); SeaDor Holdings, an affiliate of SEACOR Holdings (CKH); Kensico Capal Management; and Dorian Holdings. Its customers include global energy companies such as Statoil and Shell, commodity traders such as Petredec, and industrial users.

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Dorian posts 138% revenue growth

For fiscal 3Q15, Dorian reported revenues of $32.6 million, representing time charter and voyage charters earned for its five VLGC vessels and its pressurized 5,000 cubic metres (or cbm) vessel. The revenue rose 137.7%, up from $13.7 million in the previous year’s quarter.

The increase is primarily attributed to the delivery and operation of two newbuilding VLGCs in 2014. It saw a net loss of approximately $1.3 million compared to a net gain of $0.3 million for the three months ending December 31, 2013.

Dorian updates on LPG shipping market trends

Dorian reports, “LPG exports this year are on track to exceed 17 million metric tons, which is roughly a 25% increase over 2014. This growth, which has been supported by export terminal expansions in the Gulf, has continued to drive high global fleet utilization and strong spot rates for VLGCs.” The company added that falling oil revenues did not have much of an impact on LPG shipping demand.

Dorian said it believes “that the fundamentals that have propelled recent growth in global LPG demand remain largely unchanged as its attractive price levels and favorable environmental characteristics make it a preferred energy source for many sectors of the economy.” The company expects to benefit from growth in US exports and China’s potential demand for LPG.

CalPERS holdings updates in 4Q14

The pension fund added new positions in Dorian LPG (LPG), CDK Global (CDK), Keysight Technologies (KEYS), and LM Ericsson Telephone Company (ERIC). The fund exited a stake in Medtronic Plc (MDT), Taiwan Semiconductor Manufacturing (TSM), and Equinix (EQIX). It enhanced its positions in Kinder Morgan (KMI) and Staples (SPLS).

The next part of this series will highlight the fund’s position in CDK Global.

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