Greetings, and welcome to the Dorian LPG fourth quarter and full year 2022 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. As a reminder, this conference is being recorded. Additionally, a live audio webcast of today's conference call is available on the Dorian LPG's website, which is www.dorianlpg.com. I would now like to turn this conference over to Ted Young, Chief Financial Officer. Thank you. Mr. Young, p lease go ahead.
Thank you, Laura. Good morning, everyone, and thank you all for joining us for our fourth quarter and full year 2022 results conference call. With me today are John Hadjipateras, Chairman, President, and CEO of Dorian LPG Ltd, John Lycouris, Chief Executive Officer of Dorian LPG (USA), and Tim Hansen, Chief Commercial Officer. As a reminder, this conference call webcast and a replay of this call will be available through June 2nd, 2022. 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 you to our unaudited results for the period ended March 31, 2022 that were filed this morning on Form 8-K. In addition, please refer to our previous filings on Forms 10-K and 10-Q, where you'll find risk factors that could cause actual results to differ materially from these forward-looking statements. Please note that we expect to file our full 10-K for the 2022 fiscal year in the near future. Finally, for your reference during our formal remarks, please refer to the earnings supplement that we posted this morning on our website. With that, I'll turn the call over to John Hadjipateras.
Thanks, Ted. Good morning, and thank you for joining John, Ted, Tim, and me to discuss our fourth quarter financial year 2022 results. The Baltic VLGC Index averaged about $57 per ton for the period January through March. As of yesterday, rates had improved to $94.8 per ton. Global exports increased 1.7 million tons in the first four months of this year compared to the same period last year, or about 5%, with the Middle East the main contributor to global export growth, up 13% year-on-year. Tim will give you more details. The price spread between heavy fuel oil and low sulfur fuel oil is currently around $230 per ton, providing a good return on our investment in scrubbers, as John will illustrate shortly.
Our new bunkering manager with the chartering operations departments are making considerable impact on sourcing best quality and best price bunkers for our fleet and our pool fleet. In its May short-term energy outlook report, the EIA estimated that U.S. LPG exports will grow 6% in 2022. It expects the trend to continue, with exports increasing 15% in 2023, driven by continued production growth and lower domestic demand. Our outlook for the next quarter and the remainder of the year remains sanguine. In recent weeks, Panama Canal congestion has increased waiting days, which is good for overall fleet utilization. There are only two newbuilding VLGCs scheduled for delivery between now and the end of June, three in the third quarter, and seven in the fourth. We are faced with new challenges resulting from the invasion of Ukraine.
In addition to the continuing and significant disruptions due to COVID. Our crewing operations, HSEQ and other departments have worked comprehensively to facilitate crew changes and to ensure that our seafarers are working well together and that their families are safe. 87% of our seafarers are fully vaccinated. 298 out of a total of 870 were vaccinated at U.S. ports. Our tech and performance teams are assessing solutions ranging from traditional Mewis Ducts combined with boss cap fins to more innovative technologies like air lubrication under the hull and advanced battery systems. We believe a combination of retrofitting the most promising hardware and engine power limitation will safeguard the competitive earnings advantage of our ECO ships and comply with new emission regulations. John will say more about this.
We began evaluating LPG as fuel seven years ago, and 10 of our vessels were built retrofit-ready. The additional cost to opt for dual- fuel for a new building is not great, but to retrofit existing ships is still, in our opinion, uncertain. Remaining on the subject of ESG, I am pleased to note the launch this week of the All Aboard Alliance. This is an initiative under the auspices of the Global Maritime Forum that, with other industry leaders, we participated in developing. Its purpose is to collaboratively confront the challenges of making a sustainable maritime industry by implementing policies, procedures, and leadership practices which promote diversity, equity, and inclusion in our businesses.
With a strong balance sheet, the age profile of our fleet, our new building, and the time charter of three dual-fuel new ships delivering in 2023, Dorian LPG is well-positioned with fleet renewal flexibility, allowing us to continue pursuing an optimal capital allocation strategy. Including the recently announced $2.50 per share dividend and our two $1 dividends paid in the last 12 months, as well as our stock repurchases and self-tender, we will have returned over $400 million to our investors since the IPO. Our capital allocation strategy is a balanced mix of return of capital and sensible investment in our business. Ted will tell you more. Ted, over to you.
Thanks, John. My comments this morning will focus on the recent capital allocation events, our financial position liquidity, and our unaudited fourth quarter results. Fourth quarter was very busy from a financing perspective. We completed four refinancings during the quarter for the COPERNICUS, CRATIS, CARAVELLE, and CHAPARRAL, and one financing subsequent to year-end for the COUGAR. Four of these transactions have purchase obligations, while the CHAPARRAL financing has only a purchase option. In addition to attractive terms and advance rates, we really like the longer tenors and profiles that are available to us in this market, with the tenors for these deals ranging from seven to 10 years. At March 31, 2022, we reported $236.8 million of free cash, which is roughly where our cash balance sits today.
Since March 31, we prepaid $25 million of debt under our 2015 AR Facility and refinanced the COUGAR, which generated about $30 million in net proceeds. We will be paying out roughly $100 million of cash next week for the dividend that we announced in early May. Pro forma for these transactions, March 31 cash would have been $141.7 million, which is a comfortable level for us. With a debt balance at quarter end of $670 million, our debt to total book capitalization stood at 42.1% and our net debt to net total capitalization at 32%. We have no refinancings until 2025, ample free cash, an undrawn revolver, and one debt-free vessel. Thus, we have a significant measure of financial flexibility.
For the coming year, we expect our operating cash costs per day, that's OpEx, G&A, interest and principal, to be approximately $23,000 per day, excluding the outlay that we made in May for our new building. For the discussion of our fourth quarter results, you may also find it useful to refer to the investor highlights slide posted this morning on our website. Before going into the detail of the quarter's results, I'd like to put the strength of this quarter into context. We earned roughly 1/3 of our EBITDA during the quarter, nearly 50% of our net income. These results were achieved despite the turmoil caused by the tragedy in Ukraine.
Turning to our fourth quarter chartering results, we achieved a total utilization of 89.3% for the quarter with a daily TCE, that's TCE revenue over operating days, of $43,372, which yields a utilization-adjusted TCE, that's TCE revenue per available day, of about $38,750. Again, we're using the definitions of operating days and available days as we define them in our filings. Our spot TCE per available day, which reflects our portion of the net profits of the Helios Pool, was $39,147 for the quarter, and the Helios Pool overall reported a spot TCE, including COAs, of approximately $39,313 per available day for the quarter. Our daily OpEx for the quarter was $9,370.
OpEx increased somewhat sequentially as we experienced higher crew costs driven mainly by travel costs and medical expenses, which is fairly understandable given the current COVID environment. Our time charter-in expense for the two TC-in vessels remained stable at $5.4 million. Total G&A for the quarter was $7 million, and cash G&A, that is G&A excluding non-cash compensation expense, was about $6.2 million. G&A skews higher in the fourth fiscal quarter, the first calendar quarter of the calendar year because of certain statutory accruals that we must make. Those bleed out during the year, but it does affect the fourth quarter G&A a bit. Our reported adjusted EBITDA for this quarter was $54.1 million, including a $3.8 million gain on the sale of the Captain Nicholas.
We look at cash interest expense on our debt as the sum of the line items of interest expense, excluding deferred financing fees and other loan expenses, and the realized gain or loss on our interest rate swap derivatives. On that basis, total cash interest expense for the quarter was $6 million. With the new financings that we've completed, we expect quarterly cash interest expense will increase to about $6.8 million on a run rate basis. That run rate won't kick in until the quarter beginning July 1st, 'cause we only have a half a quarter with the COUGAR. We continue to benefit from our hedging policy and the favorable pricing of our Japanese financings, leaving us with a current blended interest cost of about 4%.
Although we currently hold a roughly 90% economic interest in Helios, we don't consolidate its P&L or balance sheet accounts, which has the effect of understating our cash and working capital. To give you some additional insight around that, as of May 25th, 2022, the pool held roughly $13 million of cash. The dividend of $2.50 per share that we paid next week brings to $4.50 per share in dividends that we have paid in the last year. We also repurchased 50,000 shares of stock following the quarter end. Together with our open stock market repurchases and our $313.5 million self tender offer, we've now returned over $400 million to our shareholders since our IPO.
The significant dividend payments in the last year underscore our board's commitment to a sensible capital allocation policy that balances market outlook, operating and capital needs of the business in an appropriate level of risk tolerance given the volatility in our sector. With a strong freight market backdrop, we remain cautiously optimistic about our cash flow generation over the coming months. With that, I'll pass it over to Tim Hansen.
Thank you, Ted, and good day, everyone. Thanks for dialing in. The first quarter of 2022 demonstrated that VLGC fundamentals remained healthy. LPG production worldwide increased and as did Asian import demand. This happened amid and despite volatility brought on by an excessive period of commercial inactivity in China and the Russian Federation's invasions of Ukraine. Global seaborne LPG transport for the first quarter was the highest on record for any first quarter. Up about 400,000 metric tons compared to the previous record in 2020. North American exports continue to increase on the back of record-setting production levels. Middle East export volumes also show growth, particularly from the United Arab Emirates, Qatar, and Saudi Arabia. The export volumes for the first quarter are the highest seen since 2019.
This indicates that the OPEC+ production cut reversals have indeed had a positive impact on LPG transport. Demand for VLGC shipping during the first quarter followed the trends of previous first quarters, namely that January's demand is high, February is low, and March is a period of recovery. The BLPG1 Index indicating the market freight for the Middle East to Asia averaged about $57 per metric ton during the first quarter. This equals a time charter return of about $31,400 per day on an ECO type non-scrubber vessel, excluding idle time. This compared to $59 per metric ton or about $40,500 per day TCE on a similar vessel during the fourth quarter of 2021.
The BLPG3 Index indicating the freight from U.S. Gulf to Asia averaged about $100.5 per metric ton during the first quarter. This equals to a time charter return of about $36,700 per day. Again, on an ECO type scrubber ship. This includes idle time and also excluding Panama Canal waiting time in ballast. This compared to about $103 per metric ton or $45,300 per day in TCE on a similar vessel during the fourth quarter of 2021. The East of Suez market saw the BLPG1, again, the benchmark AG- Chiba rate, holding the firm sentiment from the end of 2021 carrying over into January.
The Lunar New Year period in February impacted the freight markets negatively, with many key far eastern players being inactive. Increasing geopolitical tensions due to concerns about Russian troops not leaving from the military exercises in Belarus further dampened the market sentiment in February. All the while, bunker prices continued to increase. Time charter earnings fell below cash break-even levels during this period. After the shock of the new war in Europe subsided, there was a lot of activity in the East trade market during March to compensate for the lull in February, but also to secure tonnage when many VLGCs began to ballast towards the west. West of Suez markets were firm through most of January and falling towards the end of the month as the arbitrage narrowed on the back of rising NWE prices.
The rise in LPG prices was anticipated as this is a seasonal event reflecting increased domestic demand in North America during the winter. There was more uncertainty about the impact of new restrictions on the new Panama locks to be implemented in January. What eventually transpired was that many charters targeted vessels ballasting to American load ports via Suez Canal or via Cape of Good Hope. This additional ton miles to the market increased the shipping demand in January. The significant increase in bunker prices after the commencement of the war in Ukraine eroded the commercial upside for vessel owners to ballast the long way to the west, however. Although the reduction then of longer ballast to North America reduced the ton miles, delays in the Panama Canal continued to absorb worldwide VLGC utilization.
The commencement of the war exacerbated the effects of the seasonal lull in February. Fixing activity was subdued in February most, much like in the East, caused by the geopolitical tensions. The unforeseen knock-on effect of the war's commencement was increased fixing activity in March and an expansion of transatlantic voyages. March was one of the busiest months for spot fixing on record for VLGCs. 19 cargoes were committed to a European discharge compared to only 11 in March of 2021. With Russian pipeline imports and smaller sized gas ships imports from Russian sources no longer viable, several European importing countries turned to VLGC loadings in North America. Imports into Sweden, Finland, and Germany increased, likely for re-export to smaller coaster destinations in Northwest Europe. Also, with naphtha exports from Russia facing restrictions and thereby raising naphtha prices, petrochemical players in Europe turned to LPG as a preferred feedstock.
For the previous quarter, it was forecasted that the first quarter of 2022 would see firm VLGC demand, increased North American production, and Middle East exports to be positive. These have transpired, as can also be seen on page four in our presentation. Also here you can see the increased congestions in the Panama Canal, which we forecasted, but the impact was less severe than we had anticipated. Going forward, these trends are assumed to continue with the market having adopted to the new normal since the start of the war. With that, I will hand over to you, John Lycouris.
Thank you, Tim. Last quarter's geopolitical events of war in the Ukraine, the Russian oil embargo, imposition of economic sanctions, and increased risk of recession to the world economies have caused volatility in the world financial markets, which have resulted in a significant increase in crude oil and gas prices due to supply dislocations and anticipated fuel shortages for most of the European countries. Since our last earnings call in early February, fuel prices have jumped more than 25% currently, having reached well over 30% at the end of the first quarter.
The average spread differentials for bunker supply at the ports of Singapore, Rotterdam, Houston, and Fujairah for low sulfur fuel oil and high sulfur fuel oil have progressively widened during that time from about $150 a ton to about $200 per metric ton at the end of the quarter and to about $230 currently. The low sulfur marine gas oil 0.1% sulfur prices stand 42% higher since our last call, indicating a shortage in the markets for this kind of product. For a vessel consuming 40 metric tons a day at sea, the fuel differential for the scrubber vessels can translate to roughly $8,000 per sailing day.
These economics are maximized on long-haul voyages because vessels need not burn more expensive low sulfur fuel oil or low sulfur marine gas oil fuels at sea or in emission controlled areas or during port stays when loading or discharging. We are pleased to note that our original expectations continue to be validated not only with our selection of the hybrid multi-loop scrubbers as opposed to open single loops, but also with our investment payback estimates having paid back more than 60% of equipment capital expenditure installation costs. We are retrofitting various energy saving devices to improve the performance and reduce the engine power requirements for our vessels, which will result in lower emissions and reduce the effect of compliance towards the EEXI, CII regulations next year.
Meantime, we await the proceedings of the IMO MEPC 78 June session to decide, among other things, on alternative methods of engine power limitation that will be available to vessels for EEXI compliance. Besides the overrideable EPL, there are non-overrideable EPL and shaft power limitation proposals that may prove valuable alternatives. Regardless of the mode of EPL chosen, the younger, more efficient ships will generally be less impacted, giving them greater trading flexibility than older tonnage. Given our experience with scrubbers, we are also looking at Carbon Capture and Storage technologies and their potential application to the marine industry in the future. We are discussing several potential solutions. However, our immediate objectives are implementing marine technologies that already exist and which can provide immediate results while studying innovation, technological innovation and marine applications that become available commercially and feasible financially .
The close monitoring optimization of energy consumption on board our vessels to support our vessel performance and emissions reduction initiatives is ongoing. Our performance department team has introduced a crew feedback module, which is an online tool that provides crew with real-time vessel performance indicators as well as fleet-wide indicators. This will assist, guide, and engage our seaboard personnel in seeking to optimize fuel consumption and provide comparative results from sister vessels to the fleet on board and ashore. There have been further significant regulatory updates for the maritime sector since our last report.
We had reported on the European Union announcement in July 2021 that the maritime transport would be included in its EU Emissions Trading Scheme System, and that in January 2022, the EU legislator had proposed several amendments to that July 2021 proposal, which went beyond what the IMO had proposed and agreed to during their MEPC 77 meetings. Last week, the Environment, Public Health and Food Safety Committee of the European Parliament voted for a basket of amendments to accelerate the maritime sector's inclusion to the Emissions Trading System. The initial three-year phase-in period is proposed to be revoked. Instead, shipping companies must deliver EU allowances for 100% of their inter-EU voyages and 50% of their inbound and outbound EU emission voyages right from 2024.
Those inbound and outbound voyages are to rise to 100% emission allowances. This new scope will come to include other greenhouse emissions besides CO2, such as methane and nitrous oxides. Finally, a clause is proposed to allow ship owners to pass emission costs to the commercial operator of the vessel. All the above measures signal EU's intention to lead the race to decarbonization and outpace the IMO in the process. The accelerating focus on energy efficiency will likely force owners to make hard decisions about the cost of investing in the upgrades of older tonnages and on their ability to compete in the main trades.
We think it is likely that several owners will find it more economical to scrap older tonnages, particularly those several generations older, rather than be burdened with increasing stricter environmental regulations, which will penalize high fuel consumption, smaller capacity, and non-eco engines. For vessels that are newer, we believe that investments will be imperative and therefore the owners with access to reasonably priced capital will be positioned to make the necessary investments and achieve reasonable returns. Our decision to invest in scrubbers was possible because of our financial strength and has helped us generate very solid results, which gives us confidence as we look forward and evaluate the next wave in marine technology advancements.
At Dorian, our goal is to continue improving our greenhouse gas footprint, eventually reaching a zero emissions target, and we are optimistic that our fleet will be among the best positioned to meet the demands of charterers, regulators, and shareholders. Now I pass it over to John Hadjipateras.
Thank you, John. We're happy to take questions. Laura, do you want to see if there are any questions for us, please?
With the prepared remarks completed, we will now open the line for questions. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary for you to pick up your handset before pressing the star keys. One moment while we poll for questions. Our first question comes from the line of Brian Reynolds with UBS. You may proceed with your question.
Hi, good morning, everyone. Just curious if you can talk about just the Russian invasion of Ukraine and how it's impacted the global flow of LPG. We've seen some upward revisions in U.S. LPG export expectations and expansion announcements recently. I'm curious if you can talk about how much of that is just due to, you know, displacement of Russian LPG and the demand for it versus just natural organic growth that may have not been baked in before.
I'll let Tim answer that. I can tell you, for example, that we've performed a voyage from the U.S. Gulf to actually from Marcus Hook to Finland, which is something that we'd never done before. That was an indirect result of the conflict, I believe. Tim can give you more details.
Yeah. I think as I mentioned before also we did see increased activity into Europe and we have looked at various analysts of what they come to of the consumption in especially Poland and Ukraine, which is using LPG for car fuel. Overall received a demand for around four VLGC cargos a month into Europe in addition to what is normal has been going in there to cover this demand. This is all kind of new demand in the way that it is previously coming on rails and trucks from Russia. It has shifted into seaborne demand. In addition to that, as I mentioned, the naphtha prices have been high.
As you've seen on the fuel prices, especially on the spread from heavy fuels to low sulfur fuel oil, there's a lack of clean fuels, which have caused naphtha also to be very expensive and LPG shifting into that space for the crackers in Europe. Also we have seen some LPG actually being reinjected into the LNG stream in Europe due to the high LNG prices and lack of demand for LNG. We estimate it to roughly four to five VLGCs a month on a regular basis of demand.
Great. That's super helpful. Thank you for the color. Maybe as my one follow-up, just curious if you could talk a little bit more about the future propulsion technology. I think you talked about how scrubbers, you know, ended up, you know, improving your payback period. Pulling that forward. Wo ndering, you know, looking forward, is there any more consideration of dual- fuel technology or anything else just given, you know? Maybe just talk a little bit about the bunkering market, just given that we're seeing low inventories across the refined products market globally. Thanks.
Yeah. Tim will answer your question on the bunkering market. John will give you a bit of background on the rest of your question. On the question of dual- fuel, you know, we've kept this open all the while because the economics are changing all the time. So far, we're happy with what we've done scrubber-wise. We feel that having the optionality and not having done dual- fuel to date is a positive, but we still have the optionality for that. As you know, we opted for that for dual- fuel on our new building, as well as the three new buildings that we chartered in.
Yeah, Tim will tell you about the bunker market, and then John will tell you a little bit about efficiency and all that stuff.
Yeah. On the bunker side, I think as John Lycouris also mentioned, the spread has widened, and as I mentioned, there's a shortage of clean products. I think at the moment in Singapore, we see a spread of around 340 or something between the low sulfur fuel oil and heavy fuel oil. We are seeing the supply difficulties around the world, and we see that continuing for considerable time, as long as the war in Ukraine has effect, which it might have for long after the war hopefully ends.
I think with the high oil prices which we will likely see going forward these spreads will remain on heavy fuel and those types of fuel. We have seen lately LPG prices coming off and coming back into the space where it becomes economical to use LPG fuel as well. All while it's still less advantageous than burning heavy fuel at the moment. It has definitely increased its competitiveness over the last couple of months.
Great. Appreciate all the color today. Thanks, and have a good one.
As a reminder, if you would like to ask a question, please press star one on your telephone keypad. One moment while we pull for questions. Ladies and gentlemen, this is the end of today's question-answer session. I would like to turn this call back over to Mr. John Hadjipateras for closing remarks.
Terrific. Thank you, Laura. Thank you everybody for dialing in and for questions, and hope you have a good summer. We'll talk to you next quarter again. Thank you. Bye-bye.
This concludes today's conference. You may disconnect your lines at this time. Thank you for your participation and enjoy the rest of your day.