Dorian LPG Ltd
NYSE:LPG
Earnings Call Analysis
Q3-2024 Analysis
Dorian LPG Ltd
Dorian LPG hosted its third quarter 2024 earnings conference call which was accessible through an audio webcast on their website. The call was recorded and available for replay until February 8, 2024.
The company reported unprecedented financial success including a record average Time Charter Equivalent (TCE), record spot TCE, and record EBITDA for the year to date. This success was attributed to strategic positioning within the LPG sector and beyond. They also highlighted the ability to maintain a strong balance sheet and fulfill shareholder returns.
In 2023, Dorian LPG absorbed 40 new ships, indicating a growing fleet. Despite considerable market volatility, the company interpreted the environment as evidence of demand and supply nearing equilibrium. Additionally, assurance was expressed on the account of the Canal Authority's prioritization which may benefit the LPG sector. Given these conditions, the company remained optimistic about future performance.
To improve the quality of life for their Ukrainian seafarers, Dorian LPG implemented a simplified payment system. They also engaged in social initiatives to foster diversity and enhance opportunities for all genders at sea.
Dorian LPG is making strides towards sustainability by investing in energy-saving technologies and monitoring emissions. One of their ships was given an eco-friendly coat of silicone paint, and engine diagnostic tools were installed on 20 ships. Moreover, a new VLGC ship has been ordered for delivery in 2026, illustrating a commitment to modernizing their fleet with the capability of transporting ammonia.
The company's strong financial position was emphasized with a free cash balance of $208.5 million reported at the end of 2023. They noted an increase from the $192 million reported at the end of the previous quarter even after paying out a $40 million dividend. Additionally, they revealed a policy regarding their cash cost per day for the upcoming year of $25,000 to $26,000, excluding capital expenditures.
Dorian LPG achieved a historical high Time Charter Equivalent (TCE) of $76,337 per operating day with a utilization rate of 93.6%. For the next quarter, they have secured over 60% of available Helios Pool days at a TCE exceeding $100,000 per day, reflecting robust rates from earlier bookings.
Operational expenses per day, excluding dry docking costs, were $9,909, with a reduction from the previous quarter due to lower costs in certain areas. The company maintained attention to cash general and administrative expenses while managing noncash compensation expenses in line with guidance.
Dorian LPG reported an adjusted EBITDA of $133 million for the quarter, which was the best in its corporate history. The company also noted a decline in cash interest expense and remained proud of their 33.4% return on shareholders' equity over the last 12 months, which signified substantial profitability.
Dorian LPG is aligning with environmental regulations, such as the EU Emission Trading Scheme, and investing in innovative companies focusing on carbon and methane emissions solutions. Their commitment extends to the green hydrogen economy, acknowledging its potential dependency on ammonia, a fuel for which Dorian anticipates capitalizing upon commercially and financially.
During the question and answer segment, executives fielded queries from analysts. They confirmed strong booking rates and addressed the pullback in rates, citing temporary market factors and expressing confidence in a rebound within the same quarter.
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Good morning, and welcome to the Dorian LPG Third Quarter 2024 Earnings Conference Call. [Operator Instructions] 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 like to now turn the conference over to Ted Young, Chief Financial Officer. Thank you, Mr. Young. Please go ahead.
Thank you, Rob. Good morning, and thank you all for joining us for our third quarter 2024 results conference call. With me today are John Hadjipateras, Chairman, President and CEO of Dorian LPG Limited; 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 February 8, 2024. 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 December 31, 2023, that were filed this morning on Form 10-Q. In addition, please refer to our filings on Form 10-K where you'll find risk factors that could cause actual results to differ materially from those forward-looking statements. Finally, please also refer to the investor highlight slides posted this morning on our website to which we will refer during the call.
With that, I'll turn over the call to John Hadjipateras.
Thank you, and thank you for joining us, John Lycouris, Ted, Tim and me to discuss our third quarter financial 2024 results. As you will hear in more detail from Ted in the financial year-to-date, we earned a record average TCE, record spot TCE and record EBITDA. While maintaining a strong balance sheet and capital to invest in our segment, adding our decarbonization initiatives, we continue to return capital to our shareholders.
Including our recently declared dollar per share dividend, we will have returned over $690 million to shareholders since our IPO. As one of the largest operators in our segment, we believe we are well positioned to continue our profitable performance in the LPG sector and beyond. More than 40 ships were absorbed into the fleet in 2023, a 12% addition, this was the largest number of ships delivered in a single year since the delivery in 2016 of 46 ships, which represented 23% of the then existing fleet.
Of the 17 newbuildings slated for delivery in 2024, 4 have already started trading. We view the market volatility of 2023 and particularly the big rate spikes as evidence of demand and supply being close to equilibrium. The recent near total elimination of waiting time for the canal, which is still draft restricted, is not sustainable. The Canal Authority is prioritizing container ships and LNG ships over LPG. There are 109 Neo-Panamax container ships and 73 LNG ships slated for delivery this year.
For these reasons as well as the power reduction resulting in slower speeds, which didn't happen last year, we are optimistic. On the HR side, we continue to invest in improving the quality of life of our displaced Ukrainian seafarers and their families. We recently introduced a simplified payment system through an e-wallet that enables them to receive their monthly allotments quickly and with less hassle.
On the social front, we will enter our Cheyenne in a final program through the All Aboard Alliance, a global maritime forum sponsored initiative, which will enable accelerated data collection regarding diversity and increased opportunities for all genders at sea.
We are evaluating compelling emission saving devices and low friction paints for our ships. During Q3, we painted one of our dried out ships with silicone paint and have signed new contracts for energy saving devices that will be retrofitted in the coming year.
We also continue our real-time emission monitoring program and have enhanced the initiative by installing [indiscernible] Ecotorq engine diagnostics tools on 20 of our own ships. We have expanded our performance team in Denmark by adding a mechanical engineer.
We ordered a newbuilding, VLGC, VLAC from Hanwha shipyard in Korea for delivery in 2026 and are investigating opportunities to upgrade some of our existing ships to carry ammonia. John Lycouris will speak further on this topic. Ted, you have the floor.
Thank you, John. My comments this morning will focus on our financial position and liquidity, our unaudited third quarter results and our capital allocation decisions. At December 31, 2023, we reported $208.5 million of free cash, which represented a very solid increase from the $192 million reported at the end of September. The $208.5 million is, of course, reported after the payment of the $40 million dividend that was declared and paid during the December quarter. As of January 31, we had an unrestricted cash balance of $215 million, which is net of the $23.8 million down payment made on our VLGC, AC newbuilding during January 2024. We do not consolidate the P&L or balance sheet accounts of the Helios Pool, which has the effect of understating our reported cash.
As of January 31, 2023, the pool held cash of $36.2 million, and since we have a roughly 86% economic interest in the pool, it equates to cash of approximately $31 million, which is not otherwise reported on our balance sheet.
With a debt balance at quarter end of $623.8 million, our debt to total book capitalization set at 38.8% and net debt to total book capitalization at 25.8%. As we have previously reported, our banks agreed to increase our revolving credit facility from $20 million to $50 million and to add a $100 million accordion line for vessel acquisitions to the facility. We are grateful for their support and for their endorsement of our stewardship of their capital.
We've begun to evaluate various pre- and post-delivery financing options for our VLGC, AC with an aim of maintaining our low debt costs and high level of financial flexibility.
Looking forward, we expect our cash cost per day for the coming year to be in the range of $25,000 to $26,000 per day excluding capital expenditures for dry docking and potentially upgrades for ammonia capability in our existing fleet, which John will discuss later.
For the discussion of our third quarter results, you also may find it useful to refer to the investor highlight slides posted this morning on our website. I would also remind you that my remarks will include a number of terms such as TCE, operating days, available days and adjusted EBITDA. Please refer to our filings for the definitions of these terms.
For our third quarter targeting results, we achieved a TCE of $76,337 per operating day with a total utilization of 93.6%, yielding utilization adjusted TCE of about $71,431. This TCE result represents the best in the company's history. As our entire spot trading program is conducted through the Helios Pool, the spot results for Helios are the best measure of our spot chartering performance. For the December 31 quarter, the Helios Pool earned a spot TCE of $91,417 per day, which is the highest spot rate the pool has ever earned for a quarter.
On Page 4 of the investor highlights material, you can see that we have 5 Dorian vessels on time charter within the pool, plus 1 MOL Energia vessel, indicating spot exposure of about 75% to 80% for the 27 vessels in the Helios Pool.
Turning to the quarter ending March 31, 2024, we currently have over 60% of the available days in the Helios Pool, booked at a time charter equivalent in excess of $100,000 per day, reflecting the very strong rates booked earlier for voyages that will be carried out this calendar quarter.
Please note that, that rate includes both spot fixtures and time charters. Our OpEx per calendar day, excluding dry docking costs, was $9,909 which was down somewhat sequentially from the prior quarter. Reductions in lubricants and spares and stores drove the decline. Our time charter in expense for the 4 time charter in vessels came in at $8.4 million, which is lower than budgeted due to some fuel efficiency underperformance claims.
Total G&A for the quarter was $7.7 million and cash G&A, that is G&A excluding noncash compensation expense, was about $6.3 million. Of that $6.3 million, about $500,000 included [indiscernible] Ukrainian seafarers and some employee bonuses, plus our core G&A came in at roughly $5.8 million, which is consistent with our expectations.
Noncash compensation expense for the quarter was $1.4 million, which is consistent with the guidance that we gave last quarter. Our reported adjusted EBITDA for the quarter was $133 million, which is the best quarterly adjusted EBITDA in our corporate history. Our adjusted EBITDA for the last 12 months is nearly $415 million.
Turning to debt service. Our cash interest expense, which we calculate as the sum of the line items, interest expense, excluding deferred financing fees and other loan expenses and realized gain/loss on interest rate swap derivatives for the quarter was $7.5 million, a decline of about $200,000 from the prior quarter, reflecting lower average debt and our all-in cost of debt of about 4.7%, which I would note is below current floating SOFR rates.
Quarterly principal amortization remained steady at $13.3 million. Our trailing 12-month net income is about $304 million and with average booked shareholders of equity for the same 12-month period of roughly $911 million, we generated a 33.4% return on shareholders' equity. We are proud of this result because it not only reflects the strong profitability that our platform can generate, it also shows that we've managed to keep our shareholders' equity at an appropriate level, balancing retention of capital while still paying out meaningful dividends to our shareholders.
The $1 per share dividend declared last week and payable on February 27 to shareholders of record February 5, 2024, brings our total dividends paid to $11.50 per share or nearly $465 million in aggregate. We underscore [Technical Difficulty]
Ladies and gentlemen, please stand by. We're experiencing technical difficulties, and our conference will begin momentarily. Thank you. Once again, ladies and gentlemen, please remain online. Your teleconference will resume momentarily. Thank you. Thank you for standing by ladies and gentlemen. Ted, please continue.
Thanks, Rob. Again, we're positive on the long-term prospects of our business, but we are mindful of the near-term headwinds.
With that, I'll pass it over to Tim Hansen.
Yes. Good day, everyone, and thanks for dialing in. As always, the VLGC market created some interesting times for the participants. As a record-selling strength in December, contrasted sharply with the market during January 2024. The quarter ending December 31 in '23, saw record-breaking high freight levels for VLGCs. The primary drivers of the firm freight market were the widening U.S. to Asia arbitrage several new restrictions applying to the Panama Canal and subsequent vessel routing decisions amidst the uncertainty about the Panama and the Swiss Canal transits.
Turning first to the arbitrage. In North America, production of natural gas liquids continue to increase inventories to record levels. This was amidst an unseasonably warm start to the winter. The increased supply of LPG lowered the U.S. export prices offsetting some of the short-term concerns about Asia import demand as the latter was also experiencing a warm winter. The effect of the drought in Panama has been widely discussed. The Panama can now introduce new restrictions on VLGC transit at the end of October. A severe reduction of water level necessitated a reduction in daily transits with the cost of booking transfers of VLGCs becoming more expensive.
By the first week of November, auctions for new Panama Canal transits reached a peak of just under $4 million. And some operators faced the real possibility of not being able to secure a northbound transit. VLGCs were opting for alternative routes, some turning around Mid Pacific to avoid uncertainty of the Panama Canal and a few opting to balance around South America, resulting in increased ton miles as well as impacting lead time for owners and charters in estimating arrival in the U.S. Gulf for loading.
The scheduling impact was eventually priced into the freight levels and late currents were fixed almost 2 months forward of the fixing window. The uncertainties about scheduling and the cost impact apply for vessels in both ballast and in laden with charters facing potentially restrictive high auction prices at the Panama Canal or choosing the longer laden passage via the Suez Canal.
On average, the quarter ending December '23 averaged 25 VLGCs, balancing to the U.S. Gulf via Suez for months. This compared to an average of 13 VLGCs per month on the quarter prior. The Suez Canal routing was preferred for vessels in ballast and laden to such a degree that in December, the Baltic Index saw few rates fixed under the green index [indiscernible] cheaper via Panama terms, with the [indiscernible] fixtures being reported on [indiscernible] Suez rate.
The shift in pricing norms made assessment of the market more difficult but testifies to the significant shift in trading routes for the VLGCs over the period. However, geopolitical tensions in the Middle East, made the routing via Suez a short-lived solution. When drone and missile attacks in the Red Sea escalated during December, operators began to decline the Red Sea route on grounds of safety. And VLGCs were pushed towards routing via the Cape of Good Hope.
For the first time in several years, more than 10 VLGCs ballasted via the Cape of Good Hope in 1 month. As a result, the added ton miles supported the freight market in the strong term.
Now reflecting on how conditions can change. At the beginning of January, several factors increased the fleet legs. Forecast of [indiscernible] in January in the U.S. created an anticipation of a sudden increase in domestic LPG consumption, which began to be priced into the product market and reducing the West to East arbitrage one of the key drivers.
Also, the 5 index prices were on the decline amidst Asian importers anticipating reduced import demand due to lower demand for heating. Therefore, the arbitrage started to narrow impacting the normal arbitrage economics.
During January 6 newbuildings or 29% of the expected deliveries in 2024 we delivered creating a solid increase in the vessel supply for the first calendar quarter of '24. Congestion in the Panama Canal declined significantly and rapid this month. Contributing factors include the rerouting of VLGC via Cape, lighter container vessel traffic and increased rainfall in the Panama Canal.
In Italy, this unfortunately will create a temporary oversupply in both the U.S. Gulf and Far East ports, putting pressure on the rates as we've seen during this quarter, which should normalize as vessel supply is unsold. Our freight market can be volatile and is subject to a wide range of factors that may influence short-term freight rates but we also have a number of strong cyclical and peculiar factors in our favor.
A warmer spring climate in North America will contribute to more LPG supply at more favorable prices. The anticipation going forward is, therefore, more widening east -- the west to east. We expect only 15 remaining newbuildings to deliver this year compared to the 42 that was successfully absorbed last year, we expect the newbuilding deliveries to be absorbed based on the forecasted increase in exports.
We continue to see LPG take market share from other fuel sources. And in 2024, significant growth in propane dehydrogenation and steam cracking plans are expected particularly in Asia. The Panama Canal congestion issues are far from solved. The daily transit numbers are still 10 transits less per day than in July '23, and it's only expected to revert to the normal levels during the summer.
Re-routing of VLGCs and other segments back towards the Panama Canal will again increase the congestion, and in addition to the VLGC newbuildings, there's expected delivery of 73 L&T and 109 Neo-Panamax container ships in 2024. This will increase the demand for passage of the canal and we thus expect congestion to return and to be the norm rather than the exception in the canal. Routing via Suez and Cape for VLGCs thus is expected to become more pronounced in 2024 due to the uncertainties of forecasting the Panama Canal transits and costs. Thus, we do remain positive on the medium- to long-term prospects for our business while acknowledging that short-term volatility is ever present.
With that, I will pass you over to Mr. John Lycouris.
Thank you very much, Tim. At Dorian LPG, we firmly believe that we should be part of and provide long-term solutions to the world's decarbonization objectives and goals. Our investment in scrubbers continues to derive strong returns. Our average daily net savings over the quarter on our scrubber vessels stood at about $3,000 per day -- $3,000 per day or about $3.4 million for the quarter.
Fuel differentials between high sulfur fuel oil and low sulfur fuel oil averaged about $202 in the last quarter of 2023. The pricing differential of the LPG as fuel versus fuel oil -- low sulfur fuel oil, stood at about $183 per metric ton, which was helpful for dual fuel engine vessels when operating with LPG.
We now have a total of 14 scrubber-fitted vessels and 1 chartered-in vessels. And we plan to retrofit another vessel with a scrubber unit in the second quarter of 2024. The installations of energy saving devices and the silicon hull coatings to our vessels have provided significant performance improvements in fuel savings, reduction of the fleet CO2 emissions and improved CII ratings.
Besides our Captain -- vessel Captain John NP, which was originally built as a VLGC, VLAC, as now called, we are upgrading some of our vessels to carry ammonia as it is quite visible for a good portion of the world fleet to carry out such upgrades.
The EU emissions trading system that came into effect in January 1, 2024, is applicable to all ships calling at EU ports. Shipping companies will surrender their year 2024 EU allowances, latest by September 2025 and every year thereafter, and it will reflect the CO2 emissions while their vessels were trading in EU waters.
In line with end user pays principle, the cost of complying with the EU ETS is passed by the owner to the time charter, who is ultimately responsible for the purchase and transfer of the monthly EU allowances to the owner's account. For spot voyages, we expect the EU allowances to be added to the freight invoice in line with the end users pays rule.
In continuation of Dorian's commitment to sustainability and improving the company greenhouse gas profile, we have recently invested into companies to seek solutions to climate issues from carbon and methane emissions. Ionada is planning to market a compact modular carbon capture system for small and midsized carbon emitters that will be applicable to many industries, including marine applications.
The patented technology claims 30% better efficiency than conventional carbon capture technologies as it works with a large array of hollow fiber contactor membranes of absorbent solutions, achieving about 90% capture of carbon dioxide in post combustion flue gases.
The second is [indiscernible], which focuses on the avoidance of methane gas emissions from wasted resources, such as landfill gas, biogas and waste biomass. These emissions instead of being granted or burned on site are converted into high-value carbon negative and carbon neutral fuels like bio-LNG, bio-LPG, green methanol and green ammonia. The modular and scalable technology can be situated at methane emission size where it can be transformed into high-quality syngas and after treatment consolidated and delivered to the energy, marine and aviation industries.
Finally, our recent newbuilding contract to build a new VLGC VLAC at Hanwha Ocean yard in South Korea is in line with our commitment to employ capital where we see commercial and financial opportunities for investments. We believe that the future green hydrogen economy will largely depend on large quantities of ammonia applying the season dedicated vessels.
Besides earning good economic returns on such trades, we also firmly believe that we should be part of and provide long-term solutions to the world decarbonization objectives and goals.
And now I would like to pass it over to John Hadjipateras for the closing comments.
Thank you very much, John. We're happy to take questions from anyone who is curious to ask them please.
[Operator Instructions] Our first question will be coming from the line of Omar Nokta with Jefferies.
Congrats, obviously, on a very strong and I guess, record quarter. And Ted, I just wanted to ask if you could repeat maybe the guidance figure you mentioned for the bookings to date. Did you say it was $100,000 for 60% of the quarter?
Yes, that's correct, Omar, in excess of $100,000 and in excess of 60% of the days.
And that includes the TCE?
That includes the pool TCEs.
Okay. All right. And then I just wanted to ask maybe -- and I know, Tim, you touched on this, but Obviously, last year was a very, very strong year for VLGCs. You had a big jump in U.S. exports. You had the Panama Canal, which really offset the newbuildings. And as you mentioned, the fleet was fully absorbed in. So far, things have corrected over the past few weeks and perhaps look to have maybe overshot to the downside and especially in relation to where I say the low point was at this time last year, what do you see is driving the pullback in rates? And when can we start to expect things to turn around?
Tim? Yes. You asked Tim, so I'll let Tim answer. We have the same answer anyways. Yes, yes.
Yes. So I mean you're right, we're at a lower point now than the drop of last year, and we're kind of seeing these drop always in the first quarter at some point. But this year, it was very quick and dramatic but also coming from an exceptionally high point. So I will say the start was aligned in one direction and now they are in the other direction.
I think that what we see is [indiscernible] and overreaction. And as I mentioned in the end, I think we will see U.S. inventory still very, very high. So even with the cold winter would not create the same worries that you have seen before of the U.S. running out of gas. So I think the pricing will align again quickly as soon as the worst cold is over.
And also, one of the other factors is the Panama Canal, which we see every year that after the festive season in the U.S., the number of transits decline and the -- especially for the container business, they are less busy passing in January and obviously to the Chinese holiday. So we see also that situation as a temporary blip, and we think that we will return to being -- congestions being the norm rather than the exception.
And as John mentioned, more newbuildings on LNG in container. So we see this coming, and we still see the transits are still way lower than it was last year. The number of transits available. And if you think that the new canal today only takes around 7 a day transit. So -- so if you add 100 and 170 some ships [indiscernible] VLGCs almost 200 ships more for -- that I can use a canal next year and many of them that is a main trade route, and we see this -- these congestions coming back.
So I think to your question, when is it -- when will we see a return, we think pretty soon within this quarter, we will see this aligned because I think it's been overshot on the downward side. So we do see these things correcting themselves but we're coming into the holidays in China soon. So that always puts a little bit of a damp on the market. And also there are some cargoes unsold in the water also Iranian tons that seems to be a problem to clear. So it could take a little while before we see the bounce back but still within this quarter, we do expect this to correct up.
Thanks, Tim. Thanks. I would just add that we can never really tell which quarter it's going to happen. We can give you what we think is guidance or an average for the rest of the year or whatever. But hopefully, the market will react. And the question is, when it bounces, how well it bounces. So as I said, I think, before, when the market starts falling, they kind of forget where to stop. So I think we're going to hit more quickly and then bounce back, but. There -- maybe -- you were looking for a target.
Yes. No, that's very helpful. And that makes sense, John, what you just said and obviously, Tim, very good color. I appreciate you kind of going into detail there. And then just a couple more for me and I'll turn it over. Maybe just first -- sorry next question is just on the Red Sea. Clearly, it's been very, very topical and front and center really over the past few weeks. How would you size up the impact of what's going on in the Red Sea with the diversions. How do you size up that impact on the VLGC trade say in comparison to what we've been seeing or had seen in the Panama Canal last year?
It's not so obvious, Omar, because the trade through the canal -- through the Suez Canal was almost kind of caused by the congestion through -- in Panama. Also, the -- so the Suez Canal now itself, I'm not sure. The Red Sea trade had -- the main VLGC trade out of the Red Sea is out of Jordan and in Jordan -- sorry, not out of Jordan, out of Saudi Arabia, Yanbu. And Jordan has absorbed some of the cargoes that would otherwise have gone East from Yanbu.
And that has displaced some cargoes that would have come from the state. So that is a negative on the ton mile. On the other hand, Saudi could divert the loading of the cargo from Jordan to Ras Tanura, which probably won't happen. So that total number of ships coming out of the Red Sea was, I think, 4 to 5 a month out of Yanbu, representing about 30% of the exports from Saudi Arabia. So it's not -- it's -- because we're in a flux, so I don't think it's easy to kind of predict what the eventual impact of the hostilities in that region will be -- to tell you that I don't know.
I appreciate you attempting to -- or at least summarizing all that, that's helpful context as well. And then maybe just a final one for me. Just on the newbuilding and just kind of thinking about John Lycouris, your comments about outfitting the existing fleet to carry ammonia. I guess just one question on that would be what does the cost look like to upgrade for ammonia? And then also in terms of the newbuilding, is there a price difference in ordering a VLAC versus a VLGC? And maybe just, I guess, multiple questions, but what's the difference between the VLAC and the VLGC, I guess, going forward?
Yes, Omar, it is a cost that over a number of ships is going to be quite low. But we are -- we have been looking into this for some years now. And we think that it is significantly less than $5 million and probably even lower than that when it is amortized over a number of ships. So it is something that is, let's say, it takes time, but it is not a significant cost to carry out those conversions.
Omar, we're mindful of that because it -- as it applies to our -- not to all our ships, but some of our ships, it also applies to a good number of the world fleet. So people -- we sort of get too carried away with newbuilding dedicated ammonia carriers when a good part of the fleet, the existing fleet of VLGCs could be -- may be less efficient than a new ship, but they could still carry ammonia with some modifications and upgrades.
Understood.
Our Next question is from the line of Øystein Vaagen with Fearnley Securities.
Just a quick question for me. As you just discussed, your rates have been quite high over the last couple of months in this winter astonishingly high. But you booked $91,000 roughly on the spot and pool for the fourth quarter. But again, that's not really up at the highest as we saw spot rates go to $114,000. Now you're talking about the $100,000, which I guess makes sense as ship owners take some coverage on the way up. But my question is now spot rate in its now below cash breakeven levels and close to OpEx. What kind of levels are you fixing at today? Does it work differently on the way down as well?
Well, I'd say a couple of things. First of all, just to be clear, the results that we mentioned going forward, there is a measure of time charter ships in there which are lower. The spot market rates that are booked in that forward number they're very attractive. And as for current fixing, look, that's pretty commercially sensitive information. We as a general matter don't really comment on it. But if Tim wants to give a little bit more he may, but I'd say in general, when we thought -- when he described his strategy to us, look, our guys have been proving to be pretty good at figuring out when cargoes are going to be available and how many ships are going to be available to meet the lake in and kind of flexing our planning around that.
Tim, if you want to add anything to that, feel free or not.
Yes, you can say that the drop was pretty quick. So the only things that has been fixed was kind of like what was in the front. So I should say, you take a couple on the way down, but actually, we had fixed pretty far forward already. So we didn't have much to fix in the fixing window when market dropped. So -- so most of our positions comes only available more than a month ahead from now.
So as the market has been dropping, then people doesn't fix that far ahead. So we're not really that much of the fixing window yet. So we'll see if it turns around before we get there. But yes.
And just to add on, are you fixing window now in the market in general? Is that early March now? Or where are we now?
We may not -- sorry, but we don't want to go too much into the market.
It's commercially sensitive.
Yes. Yes.
We've reached the end of the question-and-answer session. I will now turn the call over to John Hadjipateras for closing remarks.
Thank you, Rob. Thank you for your questions -- our 2 valued questioners, and have a good quarter, have a good February and see you next time.
This will conclude today's conference. You may now disconnect your lines at this time, and have a wonderful day.