Dorian LPG Q2 2027 Earnings Call Transcript

Dorian LPG (NYSE:LPG) reported second-quarter financial results on Thursday. The transcript from the company’s second-quarter earnings call has been provided below.

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Summary

Dorian LPG Ltd. reported record earnings driven by new highs in the freight market and gains from vessel sales, with total returns to shareholders since its IPO reaching over $1.1 billion.

The company completed a new seven-year $368.4 million credit facility to refinance existing debt, enhancing financial flexibility with a revolving credit and accordion facility.

Dorian LPG sold two older vessels generating $167.4 million and reduced its debt, leading to a net cash position of about $320 million by the end of the quarter.

The company is advancing its fleet with orders for three new dual fuel Panamax VLGCs and has a strategic focus on energy efficiency and sustainable operations, including scrubber installations.

Panama Canal congestion and Middle East conflicts impacted shipping dynamics, influencing freight rates and creating logistical inefficiencies, which the company navigates with its flexible fleet.

Management noted that U.S. terminal capacity was underutilized due to shipping constraints and expects freight markets to adjust quickly in response to geopolitical changes, such as a potential normalization in the Middle East.

Full Transcript

OPERATOR

Second quarter 2027 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 Dorian LPG’s website, which is www.dorianlpg.com. I would now like to turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.

Theodore B Young (Chief Financial Officer)

Thank you, Chelsea. Good morning, everyone, and thank you all for joining us for our second quarter 2027 results conference call. With me this morning today are John Hadjipateras, Chairman, President and CEO of Dorian LPG Ltd.; John Lycouris, Head of Energy Transition; and Taro Rasmussen, Vice President of Chartering. As a reminder, this conference call, webcast and a replay of this call will be available through November 12, 2026. 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 quarterly period ended September 30, 2026 that were filed this morning on Form 10-Q. In addition, please refer to our previous filings on Form 10-Q where you’ll find risk factors that could cause actual results to differ materially from those forward-looking statements. Finally, I would encourage you to review the investor highlight slides posted this morning on our website.

With that, I’ll turn over the call to John Hadjipateras.

John Hadjipateras (President and CEO)

Thank you, Ted. Good morning everyone and thank you for joining us on a busy morning. Proud to be following in the footsteps of Maersk, Genco, Seaways. And last but not least, so before my colleagues provide you with detailed comments on our financial results and an interesting market overview as well as progress of our operation, I’d like to provide some strategic perspective. The freight market, which hit new highs as well as gains on sales, are reflected in the record earnings that we are reporting today. After the one and a quarter per share dividend, irregular dividend declared by our board last week, the total return to our shareholders since our 2014 IPO will amount to over $1.1 billion. We are confident in the sector’s dynamics for the foreseeable future. With the refinancings completed in September, we feel that we have a balanced capital structure with capacity to support growth and withstand headwind may arise.

Our fleet investment and reinvestment strategy has always been measured and deliberate. The ships we have on order will have improved technical and operational features which will add to their earning potential in market cycles where bigger investments are warranted. As was the case with our expansion in 2013, we will aim to be ready to take them on. While in the last quarter the strong rate stole the show, we followed the fact that US export facilities did not operate at maximum capacity to be the most interesting development because it showed that the sector is currently short shipping. In the 12 years since our IPO, not only has US production and exports been growing, but their growth is also surprised on the upside, absorbing with new building books which at time had seemed excessive. We believe in LPG fundamentals and we hope that together with potential growth in ammonia carried down the line, demand will continue to expand has been the case to date.

Having said that, we also believe that the order book is adequate and the restraint will be rewarded. Going back to the present, the Iran conflict and its recent developments effectively put a stranglehold on exports out of the Straits of Hormuz and out of the Red Sea and highlighted the critical role that the US plays in global LPG supply. The Panama Canal is once again heavily congested, pushing more VLGCs to balance around the Cape of Good Hope and with the dry season approaching, we do not anticipate near-term relief.

While it’s impossible to predict the outcome and implications of the Middle East conflict on our trade, we believe that peace is not a threat as some have predicted, but rather it will restore and expand trade, replenish stocks and potentially clear the dark fleet when it comes. I will now pass over to Ted who will present our quarterly financial review.

Theodore B Young (Chief Financial Officer)

Thanks, John. My comments this morning will focus on capital allocation, our financial position, liquidity and our unaudited second quarter results. We’ve continued to opportunistically monetize our fleet since our last earnings call. In October we completed the sale of both Clermont, which we had discussed on our last call, as well as the Captain John NP, the oldest ship in our fleet. The two sales generated proceeds of approximately $167.4 million net of commission. We also paid down debt associated with the Claremont of $16 million.

On September 2nd we entered into a new seven-year $368.4 million credit facility to refinance several credit facilities including the 2023 amended and restated facility, the Cougar and Crest Japanese financings and the Commander tranche of the Ball Cap facility. The new facility carries a margin of 140 basis points over SOFR, which is an improvement of around 60 points compared to the 2023 A&R facility and also has an age-adjusted profile of 22 years.

The facility also has a revolving credit facility which currently has a capacity of $154 million and a $200 million accordion facility, both of which give us financial flexibility and support our future growth. We’ve also managed to keep in place an existing interest rate swap which means that about 58.5% of the current term loan balance is currently fixed at 2.85%. We’d also note that the syndicated banks includes all those previously part of the 2023 A&R facility in addition to three new banks.

In September we also announced that we entered into an agreement with Hanwha Ocean to build three 90,000 CBM dual fuel Panamax VLGCs for delivery in 2030 for a price of approximately $338 million. This brings our total number of new buildings to four. We made the 10% down payments on those vessels during the September quarter. At September 30, 2026 we reported $578.8 million of free cash, an increase of $236.6 million or nearly 70% from the previous quarter. Since September 30 we’ve received sale proceeds from Claremont and Captain John NP and enjoyed continued strong freight markets as reflected in distributions from our Helios pool, leading to our current cash balance of almost $785 million, and our debt balance of $484.8 million at quarter end was reduced following the sale of the Claremont and repayment of $16 million of debt, therefore bringing our pro forma debt balance at the 30th of September to $469 million.

Based on our stated quarter-end book debt at $484.8 million, our debt to total book capitalization stood at 25.6% and our net debt to total capitalization at negative 5%. Using the pro forma sale proceeds, the debt repayment and our current cash balance, we currently have net cash of about $320 million and a current all-in debt cost of 4.94% and our undrawn revolver of $154 million. Coupled with our healthy cash balance, we clearly have a comfortable measure of financial flexibility to support growth or whatever may come.

We expect our cash cost per day for the coming year to be approximately $27,000 per day. The slight increase versus our previous guidance is largely a function of the reduced number of vessel days following the vessel sales. For the discussion of our second quarter results you may find it useful to refer to the Investor Highlights slides posted this morning on our website. For the second quarter, the Helios Pool earned a TCE for its spot and COA voyages of $115,163 and an overall TCE result of $99,915, reflecting the very strong rate environment.

On page four of our Investor Highlights materials you can see that we have seven Dorian vessels on time charter with spot exposure of just over 73% for the 26 vessels in the Helios Pool. Dorian’s reported TCE revenue per available day for the quarter was just shy of $97,000, which for the third quarter in a row was the highest TCE rate we have earned in our corporate existence. The favorable variance versus our forward guidance is due to demurrage booked in September and favorable mark-to-market adjustments on our COAs.

We plan to issue our forward booking information in the near future. Daily OPEX for the quarter was $10,273 excluding drydocking-related expenses, which was a modest decrease over the prior quarter due mainly to lower maintenance and repair cost. Our gross time charter-in expense for the five TCN vessels came in at $18.2 million or $36,635 per TCN day. Those vessels contributed positively to our quarterly profits as we redelivered one vessel during the quarter. We note that we expect our TCN expense to decrease to about $29,954 per TCN day going forward or about $13.8 million quarterly in aggregate.

Total G&A for the quarter was $14 million and cash G&A—that’s G&A excluding non-cash comp expense—was about $8.2 million. The $8.2 million included about $1.3 million of incentive compensation expense accruals, which leaves our core G&A around $7 million. Our reported adjusted EBITDA for the quarter was $242 million, which is also a record and included $63.6 million of gains on sale from the sales of the Corsair and the Constellation. We will reflect the gains on the sales of the Claremont and the Captain John next quarter and expect those to amount to in excess of $88 million, but for this quarter just ended, excluding the gains on the Corsair and the Constellation, EBITDA was $178.4 million. Total cash interest expense for the quarter was $5.7 million, which is down sequentially from the prior quarter, and principal amortization for the quarter was $9.9 million.

For the coming quarter ending December 31st, after taking into account the changes in our financing structure, we expect cash interest expense to come in around $6.1 million and principal amortization to be about $9.8 million, excluding the $16 million we already paid in conjunction with the sale of the Claremont. The regular cash dividend declared at the beginning of the month of $1.25 per share is our 20th consecutive and 21st in total and brings the total to $20.90 per share in irregular dividends that we have paid since September of ’21. Including that irregular dividend to be paid this month, we’ve paid nearly $865 million of total dividends and have generated net income of $1.2 billion, including about $100 million of gains on sale over the same time period.

As we’ve explained, our board weighs current earnings, our near-term cash forecast, fleet investment needs and the overall market environment among a number of factors in making its determination of the appropriate level of, if any, for our dividends. Our sector can be a volatile one and our dividend policy needs to reflect that. I would note the over $25 per share dividend reflects a constructive market outlook while also allowing the company financial flexibility for future fleet reinvestment.

We continue to be on the lookout for fleet renewal opportunities and will be judicious with our free cash flow. With that, I’ll pass it over to Terrell Rasmussen.

Tim Truels Hansen (Chief Commercial Officer)

Thank you, Ted. The quarter ending September 30, 2026 has three headlines: escalating conflict in the Middle East, congestion at the Panama Canal, and record highs in the BLPG freight market. There are several aspects of the conflict in the Middle East that have had significant impacts on shipping and arbitrage economics. Whether the initial collapse of the Houthi advances to the Red Sea coast or the successful attack on the Saudi East–West pipeline, these aspects combine to create a backdrop for energy markets solving a shortage crunch for importing regions and explains energy markets acting with urgency.

Meanwhile, the Panama Canal’s critical role in US–Asia trade cannot be ignored. Record high Panama Canal auction prices and severe delays were witnessed during the quarter, amidst meteorologists concluding the coming El Niño season could be one of the most severe on record. These are the leading explanations for how The Baltic Exchange’s BLPG3 calculated TCE climbed from about $82,000 per day on July 1 to about $198,000 per day on September 30. This nominal TCE is based on a roughly 60-day round trip rather than about 80 days if the ballast length is around the Cape of Good Hope, which increases the denominator for getting per-day earnings. Furthermore, the assessed TCE does not account for weather factors, delays, and other costs.

Increased delivered product prices after the MOU ceasefire and increasing freight rates incentivized solutions to increasing exports from the Arabian Gulf and vessels to chance transits through the Strait of Hormuz, notably on oil tankers and VLCCs. Middle East exporters turned to own tonnage or willing shipowners to load at Arabian Gulf terminals and discharged to waiting vessels outside the Arabian Gulf. Additional seaborne tons of oil products and LPGs gave some relief to shortage-stricken countries in Asia and drove rates up.

However, because of irregular availability of vessels willing to transit the Strait of Hormuz, irregular scheduling to ensure a transit with least risk, and a regular supply of vessels to receive cargo in the Indian Ocean, sometimes with little notice, it is a logistically inefficient operation. Freight markets benefited from the inefficiencies, increasing vessel utilization and the requisite premiums for shipowners to take. The risk of transiting the Strait of Hormuz acted as a locomotive on the reported rates.

It should also be noted that while the shuttle services through the Strait of Hormuz have increased Middle East exports compared to the prior quarter, presently available data suggests export volumes are about half of pre-conflict levels. The secondhand tonnage markets also benefited from the new trade as Middle East exporting countries and risk-willing companies turned to purchase prompt tonnage to outright own vessels and secure a regular supply of vessels able to attempt transits through the Strait of Hormuz. The successful attack on the Saudi East–West pipeline to Yanbu by pro-Iranian interests had a significant impact on widening the arbitrage as crude oil and LPG export capabilities were severely restricted.

The Houthi alliance’s capture of Mocha and Perim Island during the 10–11 September has further expanded their capacity to attack vessels in the Red Sea and drove up delivered prices in Asia. Whereas several container alliances have committed to Red Sea transits, Bab el-Mandeb is de facto closed to tankers and VLCCs because of expressive threats to Saudi-origin cargo, as would be the case for Yanbu exports. The Houthi alliance’s advance to the Red Sea coast happened immediately after a period of rising record-setting auction prices at the Panama Canal.

In August there were 25 NeoPanamax auctions with an average winning bid of about $2 million, with winning auction prices rising above $4 million five times. In July there were 45 auctions with winning bids averaging about $1 million. The reduced number of auctions reflected the reduced transit capacity and water management implemented by the Panama Canal authorities in preparation for El Niño. Through August and mid-September, the Canal authorities issued multiple notices to the restrictions, adding planning uncertainty for shipowners and adding congestion when demand was peaking due to the elevated commodity markets.

The new records set during this calendar quarter were primarily due to high demand from all shipping sectors as seen the quarter prior, but it was the reduced transit capacity and ever-changing restrictions that made non-auction transits nearly impossible to accomplish. It should be noticed that the drought season in Panama has not yet commenced. The additional costs associated with Panama Canal congestion translates to higher freight levels and higher barriers to smooth Canal transits incentivize sailings around the Cape of Good Hope.

The longer transits from the US to Asia absorbing vessel supply explain why VLGC loadings in the US Gulf for this calendar quarter averaged about 10–12 a month compared to about 11–13 a month the quarter prior. Because North American production continues to grow, the Middle East conflict is therefore not the only point of attention for the VLGC market. The quarter ending September 30, 2026 mimics the prior quarter in that the Iran conflict has instilled urgency into worldwide commodity markets and exacerbated existing logistical inefficiencies.

Even with the VLGC market contributing to solutions for providing energy from the Arabian Gulf, knock-on inefficiencies have presented itself, and while there are no obvious silver bullets to address congestion at the Panama Canal, past experiences and the company’s flexible fleet will help overcoming those obstacles in the coming quarter and we remain well positioned to capture arising opportunities. Thank you. I will now pass on to Mr. John Lycouris.

John Lycouris (Head of Energy Transition)

Thank you, Taro. At Dorian LPG we remain committed to continually enhancing energy efficiency and promoting the sustainability of our business at sea and onshore. Of the 22 vessels we commercially operate, 14 are scrubber-fitted and five are dual fuel LPG. The high oil price is driven by the ongoing Middle East conflict and frequent shipping disruptions in the Strait of Hormuz and has caused bunker price differentials to remain elevated, underscoring the value of our fuel efficiency initiatives and installation of scrubbers in our vessels.

For 2Q27, scrubber vessel savings were higher than the previous 11 quarters, amounting to approximately $4,174 per calendar day per vessel net of all scrubber operating expenses, and has benefited our vessels with improved voyage economics. Fuel differentials between high sulfur fuel oil and very low sulfur fuel oil averaged $174 per metric ton, while that of LPG as fuel versus the very low sulfur fuel oil stood at about $314 per metric ton, making LPG economically attractive for our dual fuel vessels.

We remain committed to being at the forefront of energy efficiency advancements. Our participation in the MIT Maritime Consortium continues to support and sharpen our focus on future sustainability and operational efficiency across several areas of maritime research. One topic that has received particular attention at a recent meeting was nuclear propulsion. A panel featuring representatives from the Maritime Administration, the Department of Energy, the US Coast Guard, the American Bureau of Shipping, and the West P&I, which was moderated by a Dorian LPG Board member and ex-American Bureau of Shipping CEO Christopher Wiernicki, explored the potential of nuclear power in commercial shipping, particularly its ability to reduce emissions and enhance energy security. Ongoing research into reactor and port safety has yielded encouraging results, with floating nuclear power plant potentially paving the way for broader adoption in commercial shipping.

We continue to closely monitor developments at the IMO, particularly the ongoing discussions around the net-zero framework ahead of the MEPC 85 in late November and early December of 2026. While the final regulatory framework and implementation timeline remain uncertain, we believe a practical and globally consistent approach is important to support long-term investment decisions rather than the fragmented regional regulations. In the meantime, our focus remains on improving fleet energy efficiency, reducing emissions, and maintaining flexibility in our future fuel strategy.

We have also developed an emissions simulation model to assess different regulatory scenarios and their potential financial implications for our fleet, allowing us to remain well prepared as the regulatory landscape evolves. We are confident that the Dorian LPG fleet will be prepared to meet regulatory changes in the future, and now I would like to pass it over to John Hadjipateras for his final comments.

John Hadjipateras (President and CEO)

Thank you very much, John. Chelsea, we’re ready to take questions.

OPERATOR

Thank you. At this time, if you would like to ask a question, please press star one on your telephone keypad. To leave the queue at any time, please press star two. Once again, that is star one to ask a question. And our first question will come from Omar Nokta with Clarksons Securities. Please go ahead.

Omar Nokta (Analyst)

Thanks. Thanks, operator. Good morning. Obviously nice results. Congrats on the record earnings and record achieved rate. The business is clearly in the market, clearly are in a strong position. And you did discuss a good amount of the Panama Canal dynamic here in your remarks. And clearly there were a lot of logjams definitely throughout the year. But I did want to ask about what we’ve seen here recently. It seems at least that over the past several weeks there’s been maybe an easing in the congestion levels there.

It’s been going on it feels like maybe for past six to eight weeks. It doesn’t appear that there’s as much of a delay dynamic as there was before. And yet, you know, VLGC spot rates remain at exceptionally high levels, if not still at the, you know, near record figures. So just wanted to get from your perspective, are we perhaps maybe overplaying the impact of the Panama Canal dynamic? Are spot rates maybe structurally supported by something else beyond just the congestion that we have been seeing there?

Thank you. If you’re able to answer that. I appreciate it.

John Hadjipateras (President and CEO)

I think, like I said in my remarks, but also Taro more completely, there are several factors and Panama is just one of them. I think that the—I’d let Taro give you a better, a more complete explanation, but I think that, you know, the Panama effect, you don’t get it until you get it and it comes, and when it comes it exacerbates and then it unwinds slowly. But Taro, you can tell Omar a little more about why it seems to linger in the freight market or whether you think other factors are more influencing the freight market more than the Panama effect.

Tim Truels Hansen (Chief Commercial Officer)

Sure. Thank you for the question, Omar. Yeah, the quick answer is that a lot of the decisions about ballasting were made weeks before, several weeks before. That reduces some of the immediate congestion and adds to the ton-miles. It also is a reflection that what I mentioned about changing rules and transit, the advisories, that causes a lot of unease because you need to make your ballasting decisions, you know, a month before your laycans. That’s a reflection of that.

And also we know some will try to predict the weather way too far in advance. But we’re very aware of the fact that October, November is typically the wet season in the area and the drought season starts around the new year. So we just have to look at mitigating potential risks here. And I don’t think we’re alone because otherwise we would see more congestion. So I think it’s a perfectly fair reflection, the spot market, of where we are vis-à-vis Panama.

Omar Nokta (Analyst)

Okay, appreciate it.

John Hadjipateras (President and CEO)

In addition to the Panama effect, the ton-mile effect, don’t forget, also the inefficiency, the 50% of the volumes that are coming out of the Middle East do not travel efficiently. They get, there’s transshipment that delays both at the loading and the crossing of Hormuz and the transshipment and then the delay and then reloading. So that whole, that whole system also creates a shortage.

Omar Nokta (Analyst)

Yeah, thanks, John. Maybe just a quick follow-up to that point. Are you able to give a sense of, you know, of the volumes coming out of the Middle East, you know, what portion are coming out of, say, the Hormuz via the SDS and what’s coming out of the Red Sea?

Tim Truels Hansen (Chief Commercial Officer)

We don’t have the most recent figures. I think most are scrambling to put that data together. What you will see is for many VLGCs, you know, to answer your point about the proportion coming out of the Red Sea, they might have loaded around now, but you would not see the data until much later because those vessels are presently heading north into the Mediterranean around Africa. So you’ll have a delay in data. So unfortunately I don’t have the best answer for you right now.

I’m sure we’ll all get more clarity later on.

Omar Nokta (Analyst)

Thank you. Okay, that certainly makes sense. I appreciate it. And just one more and maybe on kind of Dorian LPG specific. Certainly you’ve been taking advantage of the strong market, especially the run-up in asset values. You monetized for the older VLGCs and you’ve been basically rolling the proceeds effectively into the new buildings. How are you thinking about the capital allocation from here? Ted, I know you’ve mentioned in your comments, you know, looking to, at modern tonnage, but you know, should we expect you maybe to continue this approach of monetizing some of the older vessels in this environment and perhaps replacing them with new buildings or do you maybe look for on-the-water tonnage

John Hadjipateras (President and CEO)

We sold, we sold five ships this year and the average age of those ships was almost 13 years and the average price that we got for them was about $83 million. The market has continued to advance and it reflects abnormal conditions. So I’m not going to say that we won’t sell anymore, but I will say that we’re not at the moment actively seeking to sell. On the newbuilding front, yes, we’re content with where we are at the moment and we’re not in a rush to go add to the orderbook.

But our natural replacement cycle would require us to do more newbuildings in the next few years. But whether we do them in the next year or beyond that is still up in the air. You know, we’re just wait, we’re content to wait and see how the prices develop.

Omar Nokta (Analyst)

Got it. Thank you, John, for that. That’s it for me. I’ll pass it back.

John Hadjipateras (President and CEO)

Thanks, Omar.

OPERATOR

Thank you. Our next question will come from Stephanie Moore with Jefferies.

Stephanie Moore (Analyst)

Hi, good morning. Thank you. I think you noted today just that U.S. terminals still didn’t run at full capacity because ships were effectively short. How much spare terminal capacity is there? When did the new export project come online? And then is the constraint now shipping rather than actually terminals? And then my second question, just to put it all together at once here, is we always think it’s important to know if we do see some kind of normalization in the Middle East and, you know, Gulf cargoes return, you know, how do you, how quickly do you, would you expect to see rates adjust? I know that’s a pretty complicated question, but would just love to get your thoughts on that dynamic too. So just those two. Thank you.

John Hadjipateras (President and CEO)

Well, not too complicated for Taro, but it’s a very interesting question. Thanks, Stephanie. Taro,

Tim Truels Hansen (Chief Commercial Officer)

Thanks for the question, Stephanie. Yeah, the way we see it right now is that the main constraint is indeed the availability of tonnage. Short and sweet. In terms of the capacity or the utilization rate—wow, I don’t have the percentage off the top of my head here. Refer to what I mentioned that compared to what we saw last quarter, we’re down about 10 loadings just from the U.S. Gulf a month. So you’re 10% inefficiencies, plus or minus. And I forgot what was the third question?

Sorry. Or maybe it’s difficult to do the follow-up. I hope that addressed it. Oh, there you are.

Stephanie Moore (Analyst)

Yes. The first question was just about terminal capacity. And the second was just on the Hormuz and house back. If we were to see some form of peace, when we would start to see rates move.

Tim Truels Hansen (Chief Commercial Officer)

Excellent question. I hope my previous remarks covered the capacity there, but about Hormuz, I think as with anything geopolitical, there will be—the initial wave is one of sentiment, and then comes the realignment of the trade. So it’s probably going to be in two phases. But in terms of the normalization of rates, we certainly, as Mr. Hadjipateras mentioned, peace is an attractive enabler of trade. So may that happen. With regards to answering your question properly, I think it’s difficult to start making predictions about when peace happens, and also, a key consideration is what kind of peace. I think there’s many options up in the air right now, and whether it’s to discuss tolls or whether it is a ceasefire or a permanent peace. And I think that’s a few too many scenarios for me to digest right now, but I think that’s a question for everybody to consider. What,

John Hadjipateras (President and CEO)

Stephanie, also you asked how fast they could be. Very fast. You know, the market may react—and very fast. But I don’t believe that in the medium to long term, we’re looking at a net negative. So you saw when the MoU was signed, the market went down and then within days it bounced again. The volumes are still there to be shipped, and if the Hormuz opens, there’ll be more volumes to be shipped. It takes time for the market to rebalance, for tonnage to get into an efficient mode.

And so I really find, as I said before, that when—when—when the threat of peace is viewed as a—as a negative, it’s a little bit silly. I don’t view it as a negative in the long run, but thank you anyway. I thought it was a nice, challenging question. It’s difficult to—also, the first part of it about the capacity. The capacity, you know, it’s difficult to pinpoint when you don’t know, when it’s a new situation, when it’s a wonderful situation to find yourself in when you’re on the supply side, where, you know, the demand exceeds supply.

But—and we haven’t, we haven’t had that too often in shipping until recently. So it’s kind of in play. But let’s see how it goes. Thank you, Stephanie. I think—Chelsea, we’re done with questions.

OPERATOR

Yes, sir. This concludes the Q and A portion of the call. I’d like to turn it back to John Hadjipateras for any additional or closing remarks.

John Hadjipateras (President and CEO)

Thank you, Chelsea. Yes, indeed. Thank you very much, Omar. Thank you, Stephanie, for your participation and everyone else, See you next quarter. Have a good fall and see you in January. Thank you.

OPERATOR

Thank you, ladies and gentlemen. This brings us to the end of today’s meeting. We appreciate your time and participation, and you may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.