Dorian LPG (LPG) risk factors, FY2025 10-K

Risks Relating to Our Company

1. 01We, and the Helios Pool, operate exclusively in the VLGC segment of the LPG shipping industry. Due to the general lack of industry diversification, adverse developments in the VLGC segment of the LPG shipping industry may adversely affect our business, financial condition and operating results
2. 02Seasonal and other fluctuations in respect of spot market charter rates have had in the past and may have in the future a negative effect on our revenues, results of operations and cash flows
3. 03vessels trading in the spot market or participating in the Helios Pool; meet our obligations, including payments on indebtedness; or pay dividends
4. 04We and/or our pool managers may not be able to successfully secure employment for our vessels or vessels in the Helios Pool, which could adversely affect our financial condition and results of operations
5. 05We face substantial competition in trying to expand relationships with existing customers and obtain new customers
6. 06We and the Helios Pool are subject to risks with respect to counterparties, and failure of such counterparties to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash flows
7. 07We expect to be dependent on a limited number of customers for a material part of our revenues, and failure of such customers to meet their obligations could cause us to suffer losses or negatively impact our results of operations and cash flows
8. 08Restrictions on VLGC transits and increased toll charges at the Panama Canal may have an adverse effect on our results of operations
9. 09Our indebtedness and financial obligations may adversely affect our operational flexibility and financial condition
10. 10reducing or delaying capital investments
11. 11Our existing and future debt and financing agreements contain and are expected to contain restrictive covenants that may limit our liquidity and corporate activities, which could have an adverse effect on our financial condition and results of operations
12. 12The 2023 A&R Debt Facility conditions payments of dividends by us to our shareholders and by our subsidiaries to us on the absence of an event of default and such payments not creating an event of default
13. 13We are exposed to volatility in the Secured Overnight Financing Rate (“SOFR”), which has only been published since April 2018 and we may be adversely affected by developments in the SOFR market
14. 14We have and may in the future selectively enter into derivative contracts, which can result in higher than market interest rates and charges against our income
15. 15Investments in forward freight derivative instruments could result in losses
16. 16Because we generate all of our revenues in U.S. dollars but incur a portion of our expenses in other currencies, exchange rate fluctuations could adversely affect our results of operations
17. 17If we fail to manage our growth properly, we may incur significant expenses and losses
18. 18On November 24, 2023 we entered into an agreement for a newbuilding VLGC/AC, which is expected to be delivered in the second calendar quarter of 2026. The delivery of the VLGC/AC will give us the opportunity to carry full cargoes of LPG or ammonia
19. 19An inability to effectively time investments in and divestments of vessels could prevent the implementation of our business strategy and negatively impact our results of operations and financial condition
20. 20If our fleet grows in size, we may need to update our operations and financial systems and recruit additional staff and crew; if we cannot adequately update these systems or recruit suitable employees, our business and results of operations may be adversely affected
21. 21The successful development and performance of our business depends on our ability to attract and retain skilled professionals with appropriate experience and expertise. The loss of the services of any of our senior management or key personnel could have a material adverse effect on our business and operations
22. 22Our directors and officers have a history of involvement in the shipping industry and some of them currently, and some of them may in the future, directly or indirectly, hold investments in companies that compete with us. In that case, they may face conflicts between their own interests and their obligations to us
23. 23We may be unable to procure adequate insurance coverage at commercially reasonable rates in the future
24. 24Because we obtain some of our insurance through protection and indemnity associations, we may be required to make additional premium payments
25. 25We may incur increasing costs for the drydocking, maintenance or replacement of our vessels as they age, and, as our vessels age, the risks associated with older vessels could adversely affect our ability to obtain profitable charters
26. 26If we purchase secondhand vessels, we may be exposed to increased costs which could adversely affect our earnings
27. 27Certain shareholders have a substantial ownership stake in us, and their interests could conflict with the interests of our other shareholders
28. 28United States tax authorities could treat us as a “passive foreign investment company,” or PFIC, which could have adverse United States federal income tax consequences to United States holders
29. 29We may have to pay tax on United States source shipping income, which would reduce our earnings
30. 30Changes in tax laws and unanticipated tax liabilities could materially and adversely affect the taxes we pay, results of operations and financial results

Risks Relating to Our Industry

1. 31The cyclical nature of seaborne LPG transportation may lead to significant changes in charter rates, vessel availability and vessel values, which may adversely affect our revenues, profitability and financial condition
2. 32Our growth depends on the continued growth of the global LPG market and supply chain. The factors affecting the supply of and demand for LPG carriers are outside of our control, and the nature, timing and degree of changes in industry conditions are unpredictable
3. 33A shift in consumer demand from LPG towards other energy sources or changes to trade patterns may have a material adverse effect on our business
4. 34A shift in the consumer demand from LPG towards other energy resources such as wind energy, solar energy, or water energy will affect the demand for our LPG carriers, which could have a material adverse effect on our future performance, results of operations, cash flows and financial position
5. 35We are subject to a number of environmental laws, regulations and restrictions, which could require significant expenditures and adversely affect our financial conditions and results of operations
6. 36uncertainties and changes regarding climate risk management and practices may result in higher regulatory, compliance, credit and reputational risks and costs
7. 37Increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to our Environmental, Social and Governance policies may impose additional costs on us or expose us to additional risks
8. 38General economic, political and regulatory conditions, as well as the perceived impact of emissions by our vessels on the climate, may adversely impact our business, financial position and results of operations, as well as our future prospects
9. 39Our operating results are subject to seasonal fluctuations, which could affect our operating results and the amount of available cash with which we can pay dividends or repurchase our common stock
10. 40Future technological innovation could reduce our charter hire income and the value of our vessels
11. 41Changes in fuel, or bunker, prices may adversely affect profits
12. 42If our vessels call on ports located in countries or territories that are subject to sanctions or embargoes imposed by the United States or other authorities, it could lead to monetary fines or penalties and/or adversely affect our reputation and the market for our common shares
13. 43Our vessels are subject to periodic inspections
14. 44Maritime claimants could arrest our vessels, which could interrupt our cash flow
15. 45Governments could requisition our vessels during a period of war or emergency, resulting in loss of revenues
16. 46The operation of ocean-going vessels is inherently risky, and an incident resulting in significant loss or environmental consequences involving any of our vessels could harm our reputation and business
17. 47substantial liabilities not recoverable under our insurances. Further, the involvement of our vessels in a serious accident could harm our reputation as a safe and reliable vessel operator and lead to a loss of business
18. 48We may be subject to litigation that could have an adverse effect on our business and financial condition
19. 49Our operations outside the United States expose us to global risks, such as political instability, terrorism, war, international hostilities and acts of piracy, which may interfere with the operation of our vessels and have a material adverse impact on our operating results, revenues and costs
20. 50Outbreaks of epidemic and pandemic diseases and governmental responses thereto could adversely affect our business
21. 51If labor or other interruptions are not resolved in a timely manner, such interruptions could have a material adverse effect on our financial condition
22. 52Information technology failures and data security breaches, including as a result of cybersecurity attacks, could negatively impact our results of operations and financial condition, subject us to increased operating costs, and expose us to litigation

Risks Relating to Our Common Shares

1. 53The price of our common shares has fluctuated in the past, has recently been volatile and may be volatile in the future, and as a result, investors in our common shares could incur substantial losses
2. 54Although we may have paid irregular dividends in the past, there can be no assurance that we will or will be able to pay any dividends in the future. A reduction in or elimination of dividends could cause investors in our common shares to incur substantial losses
3. 55On May 2, 2025, we announced that our Board of Directors has declared an irregular cash dividend of $0.50 per share of the Company’s common stock totaling $21.3 million. The dividend is payable on or about May 30, 2025 to all shareholders of record as of the close of business on May 16, 2025
4. 56These were irregular dividends and may not be indicative of future dividend payments. In general, the terms of our credit facility do not permit us to pay dividends if there is, or the payment of the dividend would result in, an event of default or a breach of a loan covenant
5. 57there may be a high degree of variability from period to period in the amount of cash that is available for the payment of dividends
6. 58Although we have initiated a stock repurchase program, we cannot assure you that we will continue to repurchase shares or that we will repurchase shares at favorable prices
7. 59We are a holding company and depend on the ability of our subsidiaries to distribute funds to us in order to satisfy our financial obligations and to make dividend payments
8. 60We may issue additional shares in the future, which could cause the market price of our common shares to decline
9. 61A future sale of common shares by our major shareholders may reduce the share price
10. 62We are incorporated in the Republic of the Marshall Islands, which does not have a well-developed body of corporate law
11. 63As a Marshall Islands corporation and with some of our subsidiaries being Marshall Islands entities, our operations may be subject to economic substance requirements, which could impact our business
12. 64It may be difficult to enforce a United States judgment against us, our officers and our directors because we are a foreign corporation
13. 65Our organizational documents contain anti-takeover provisions