Company: LPG
Filing Date: 2025-05-29
Form Type: 10-K
Source: 0001596993-25-000034
Chunk: 26

Company: DORIAN LPG LTD.
Filing Date: 2025-05-29
Form: 10-K
Item: Item 7A
Chunk 26
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ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

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We are exposed to various market risks, including changes in interest rates, foreign currency fluctuations, and inflation. 

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Interest Rate Risk 

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The LPG shipping industry is capital intensive, requiring significant amounts of investment. Much of this investment is provided in the form of long-term debt. Our 2023 A&R Debt Facility currently contains interest rates that fluctuate with SOFR. We have entered into interest rate swap agreements and have one outstanding agreement as of March 31, 2025 to hedge a majority of our exposure to fluctuations of interest rate risk associated with our 2023 A&R Debt Facility. We have hedged $148.0 million of amortizing principal as of March 31, 2025 and thus increasing interest rates could adversely impact our future earnings. For the 12 months following March 31, 2025, a hypothetical increase or decrease of 20 basis points in the underlying SOFR rates would result in an increase or decrease of our interest expense on our unhedged interest-bearing debt by $0.1 million assuming all other variables are held constant. See Notes 10 and 21 to our consolidated financial statements included herein for a description of our debt obligations and interest rate swaps, respectively.

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Foreign Currency Exchange Rate Risk

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Our primary economic environment is the international LPG shipping market. This market utilizes the U.S. dollar as its functional currency. Consequently, our revenues are in U.S. dollars and the majority of our operating expenses are in U.S. dollars. However, we incur some of our expenses in other currencies, particularly Euro, Singapore Dollar, Danish Krone, Japanese Yen, British Pound Sterling, and Norwegian Krone. The amount and frequency of some of these expenses, such as vessel repairs, supplies and stores, may fluctuate from period to period. Depreciation in the value of the U.S. dollar relative to other currencies will increase the cost of us paying such expenses. For the year ended March 31, 2025, 26% of