Q1 2025 DHT Holdings Inc Earnings Call
Speaker Change: Good day and thank you for standing by. Welcome to the Q1 2025 DHT Holdings Inc Earnings Conference call.
Speaker Change: At this time, all participants are in a listen-only mode. After the speakers presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 and 1 on your telephone. You will then hear an automated message for advising your hand is raised.
Speaker Change: To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Laila Halvorsen, CFO . Please go ahead.
Laila Halvorsen: Thank you. Good morning and good afternoon everyone. Welcome and thank you for joining DHT Holdings first quarter, 2025 running scope.
Speaker Change: I am joined by DHT's president and CEO , Svein Mushnes Harfjeld.
Speaker Change: As usual, we will go through financials and some highlights before we open up for your questions.
Speaker Change: The link to the slide that can be found on our website, DHTenshers.com
Speaker Change: Before we get started with today's call, I would like to make the following remarks.
Speaker Change: A replay of this conference call will be available on our website, DHtankers.com, until May 14th.
Speaker Change: In addition, our earnings press release will be available on our website and on the SSE AdCursystem as an extabitor form 6K.
Speaker Change: Actual results may differ materially from the expectations reflected in these forward-looking statements.
Speaker Change: We urge you to read our periodic reports available on our website. I'm Alma S.S.S.D. at Per System, including the risk factors in these reports for more information regarding risks that we face.
Thank you.
Speaker Change: As usual, we'll start the presentation with some financial highlights.
Speaker Change: We are pleased to report on another quarter with a respectable performance for DHT.
Speaker Change: In the first quarter of 2025, we achieved revenues on TCE basis of 79.3 million and adjusted that amount of 56.4 million.
Speaker Change: After adjusting for the 19.8 million gain on sale of vessel related to the sale of DHT Skinneve, the company had a net profit for the quarter of 24.3 million, equal to 15 cents per share.
Speaker Change: For the first quarter, the average D.C. for the vessels in the split market was $36,300 per day. The vessel's one-time shortage made $42,700 per day, while the average combined D.C. achieved for the quarter was $38,200 per day.
Speaker Change: DHT has a robust balance sheet with low leverage and significant liquidity.
Speaker Change: We have continued to strengthen our balance sheets and the first quarter ended with total liquidity of 277 million, consisting of 80.5 million in cash and 196.2 million available under out-to-revolve and credit facilities.
Speaker Change: At quarter end financial leverage was 16.9% based on market values for the ship, and next that was 12.3 million per vessel, while below estimated were the dual ship valleys.
Speaker Change: On this slide, we present the cash flow highlights for the quarter. We started the quarter with 7.8 million in cash, and we generated 5.6 million in EBITDA.
Speaker Change: Ordinary of the three payments and cash interest amounted to 19 million and 27 million and was allocated to shareholders through a cash dividend.
25.8 million was used for a new building program.
Speaker Change: 42.5 million was met per se from the sale of DHT Scandinavia, why 32.4 million was prepaid under one of our evolving credit facilities and can be reboraled in the future.
Speaker Change: Positive changes in working capital and other amounted to 8.4 mm and the quarter-ended with a
With that, I will turn the call over to Sine.
[inaudible]
Thank you, Laila.
You will hair-take-you through some court-layer highlights.
Speaker Change: He sold all the ships that the British Navy built in 2006 for 43.4 million.
Speaker Change: She delivered in January and we record the capital gain on 19.8 million during the quarter.
Speaker Change: She was debt-free and her proceeds will be allocated to general corporate purposes, her under investments in vessels and or share buybacks and or pre-payment of debts.
Speaker Change: We entered into two time-farting contracts. Firstly, the DHT China built 2007 and one of our older ships was fixed to a leading commodity trader for one year at $40,000 per day.
The contract commenced in gender [inaudible]
Speaker Change: Secondly, this is the DHT Tiger Bill 2017 to one of our largest customers, an oil major, for a year at 62,500 per day.
This contract commenced at the end of March.
This is a March our 61st consecutive courtly cash dividend.
Speaker Change: The shares will trade ex-dividend on May 21st and the dividend will be paid on May 28th.
Speaker Change: In the graph to the left, we share our DNL and the Clash Break even levels for 10-25 35
Speaker Change: As you will see the difference between the two is estimated at $7,200 per day for the air.
Speaker Change: This discretionary cash flow will remain in the company and be allocated to general corporate purposes within pension being to fund installments under our new building program.
[inaudible]
Speaker Change: The graph from the right illustrates the accumulated dividends since updating our capital allocation policy from the third quarter of 2022.
Speaker Change: The accumulated amount of dividend is $2.51 per share and reflects well during a period in which our share prices are appreciated.
Speaker Change: and then made share by Vax, totaling 32 million, equal to 2% from 3% of the company, in addition to the quarterly cash dividends.
Svein Harfjeld
Speaker Change: Here we update you on the bookings to date for the second quarter of 2025.
Speaker Change: We expect to have 780 times shorter days covered for the second quarter at $42,200 per day.
and improvement and compare to the prior quarter.
Speaker Change: This rate assumes profit sharing for the month of April , and it pays straight only for the months of May and June , for the time for the contracts that has profit sharing feature.
Speaker Change: Given the current spot market, there is potential for additional profit sharing and upside to the time for the two wrestlers once the quarter is done.
Speaker Change: We assumed 1,245 spot days in the quarter, of which 72% had been booked at an average rate of 48,700 per day.
and meaningful improvement than compared to the first quarter.
Speaker Change: The current market is strong and they are constructed on the way forward.
Speaker Change: The spot P&L break even for the second quarter is estimated to be 17,500 per day, a number you may use to estimate the net income contribution from our spot fleet for that quarter.
and Svein Harfjeld.
We will now discuss updates to our feeds.
Speaker Change: As earlier announced and subsequent to the first quarter, we entered into a truly long-term time factor and an agreement to sell to all the ships.
Speaker Change: The DHT Apollosa, built 2018, has entered into a seven-year-time charter with a global energy company, also commonly referred to as an oil major.
Speaker Change: The contract has a fixed base rate of 41,000 per day plus an indexed base profit sharing structure calculated on the vessel's specification.
Speaker Change: The vessel in question is an excellent ship and is expected to provide competitive earnings under a pre-agreed calculator for the profit sharing. And the index earnings in excess of 41,000 per day will be shared equally between the customer
Speaker Change: We really like the deal and it offers long-term visibility on base earnings. They were protecting the downside, whilst retaining upside to the markets.
Speaker Change: We agreed to sell the DHT Lotus and DHT Pione for a combined price of 103 million.
Speaker Change: The vessels were built of Bohus shipbuilding in 2011 and came into DHT through the BW Fleet acquisition in 2017.
Speaker Change: The vessels were required for a combined price of 115.8 million and have served us well during these eight years.
Speaker Change: The DHT Lotus was delivered to a new honours during April and the expect to record a game of 17.5 million in the second quarter.
Speaker Change: The DSTP only is expected to deliver during July and the project to record a gain of 15.5
Speaker Change: The proceeds from the saves will be allocated to general corporate purposes, again, here on their investments, investments, and their share-barred acts, and their p-paymental debts.
[inaudible]
Here is our Fleet Employment Overview
Speaker Change: The currently a total of nine ships on time charter, all which three are coming off during this year. Family, DHT Europe , DHT Lyon and DHT Harrier.
Speaker Change: The DHT Puma and the DHT Apollusa in green color have profit sharing features built into the contracts and is offering a combination of a certain level of earnings visibility without giving away all the upside in the strong markets.
[inaudible]
Speaker Change: We are meaningful exposure to this rising freight market, both in the spot market and the potential re-rating on new times for other contracts.
Speaker Change: Further, we will, as you probably know, expand our fleet with four new and very competitive ships in the first half of 2026.
Speaker Change: These ships have gained a total of close to 800 additional earnings space in 2026 compared to when the contracts were entered into.
Speaker Change: Here we provide an update on the corporate transaction. Subsequent to the quarter, we have acquired a remaining outstanding shares in good with sheet management for a purchase price of 6.1 million. As a result, DHT now owns 100% of the company.
Speaker Change: This company is a very important pillar in these business and strategy undertaking the technical management to our six, including recruitment, employment, and training of our C-fairs.
Speaker Change: The company is now fully integrated into DHT and we will continue to develop and build on its excellent safety and operational track record and support of our long-term strategy
[inaudible]
Speaker Change: Now an update on our debt financing. We have entered into a 30 million secured reducing revolving facility with Nordea, being one of our relationship banks.
Speaker Change: The new loan will refinance the current facility for the DHT Jagger with its current outstanding debt to 25.5 million.
Speaker Change: The new loan is priced at 175 basis points, a bone sulfur and is a DHT-style financing, including a six-year tenor and a 20-year repayment profile.
Thank you.
View reiterates our views that the dynamics of our market.
Speaker Change: is increasingly becoming a favorable supply story. The rapid leasing fleet exceeding a benign order book for new ships and the spring of sanctions making it increasingly challenging to trade ships in the Southern Fleet.
The graph updates the demographics, all the uses heathens [inaudible]
Speaker Change: I apologize for being repetitive, but we think it's important to reinforce the obvious which is that the need to see if it is set to shrink At the time and the amount for our services is growing
Speaker Change: By the end of the 26th, we estimate 441 years this is to be older than 50 years of age.
and 199 to be older than 20.
Extraordinary, we estimate 58 to become older and 25ers.
Speaker Change: All these numbers assume no scrapping, staggering numbers, and in support of our markets and business.
Speaker Change: The order book for new exercise is been mined with about 11% for capacity on audio.
Speaker Change: The five ships delivered for the remainder of 2025.
28th as scheduled for 26th.
48 in 27 and 19 in 28.
Speaker Change: of the order book about 20% are being constructed and built in Korea.
Thank you.
Speaker Change: OPEC has started to bring more of its oil to the markets, contributing to strengthen frequent freight routes, evidence through new highs for the year and higher lows.
Speaker Change: We believe OPEX decision to amongst others is supported by the following.
One, Continued Oil Demand Growth [inaudible]
Speaker Change: 2. A temporarily moderating growth to the factory of Atlantic-based oil production, offering an opportunity for OPEC and Saudi Arabia in particular to regain some market share.
Speaker Change: Low Prudolevent Inmentories in China, requiring refilling to support growth and new refining capacity coming on stream.
Speaker Change: And lastly, a certain sanctioned oil production being at risk with a possible need for replacement.
Speaker Change: Our markets have for the past two and a half years or so feared that they'd done what most people think.
Speaker Change: In fact, DHT's average spot market earnings for this period would just shy of $50,000 per day.
$49,300 per day to be precise.
We think this is a very hands-on number [inaudible]
Speaker Change: With the favorals supplied, backdroped and the constructive oil markets for freight, we believe it is reasonable to expect rewarding times ahead.
or in plain English, B-Bulless.
Speaker Change: We continue to focus on what we can control and delivering on what we believe is a resilient business approach and strategy.
Speaker Change: We receive encouragement from our key stakeholders, namely shareholders, customers and lending
Speaker Change: Irrespective of which constituency you belong to, you should expect us to focus on solid custom relations, its safe and reliable services.
Speaker Change: A competitive construction with robust brake-even levels, a solid balance sheet, and a clear capital allocation policy to create long-term shareholder value.
Speaker Change: The appreciates encouragement and will seek to earn anything, work hard and operate with leading governance standards and a high level of integrity.
Speaker Change: And with that, we open up for Q&A. Over to you, operator.
Speaker Change: Thank you. As a reminder to ask a question, you will need to press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again.
Speaker Change: Our first question comes from the line of Frode Morkedal from Clarkson Securities. Please go ahead your line is open.
Thank you. I saw it. I got it.
Speaker Change: First off, I guess on the vessel sales sold it to only Chinese Bill chips, I guess that's not the coincidence, right? So maybe you can talk first player about...
with the decision to do that and the...
Speaker Change: You know, how you're thinking about that Korean versus Chinese-built chips? That's the first question and that's related to that. I guess you have a lot of cash coming in, 80 $5 million off the debt and then you list.
Speaker Change: General Corporate Purposes and Investments is first, Sherbert, second and three payment of debt. Is that Queensland, or is that actually the priority as you see it now?
Speaker Change: So, you know, these two ships, as we say, have been with us for eight years.
Speaker Change: We bought them on some ten, twelve million dollars, I brought what we sold them from now so it's been a very, very good investment so in a way it's also a good opportunity to take some profit off the table.
Speaker Change: So that's really with that. On the chronology of the three items apart from cash dividends, that is in no specific order, it depends on the time and the opportunities we can find in the market and so forth.
Speaker Change: It is of course in general our priority to invest in ships as opposed to investing in buying our own stock or invest further in the balance sheet, which is already super strong.
Speaker Change: So that it's not so easy to find opportunities, we are in this market all the time and...
Speaker Change: If we are able to identify good investments, we have ample firepower to do that and can do that without seeing any additional capital in the company. So, time will tell what we can actually deliver on.
Speaker Change: If you look at our historical buybacks, you will know that they are.
You know, an area where you should expect us to apply capital.
Okay, that's on the instance. Thank you.
Thank you. We'll now move on to our next question.
Speaker Change: Our next question comes from the line of John Chappell from Evercore ISI. Please go ahead, your line is open.
Speaker Change: Thank you. Good afternoon. I'm Simon the Appalooza contract really stands out, given inspiration but also the structure. The rate is higher than one of the one-year time chargers you just did.
Speaker Change: Is this a complete one-off or are you seeing more appetite for extended contracts and more appetite for profit share contracts? It seems to be a kind of structure of the past as opposed to the present times.
Speaker Change: You know, it will be hard to find really good assets from top operators like VST, so they are concerned about securing, I think, you know, quality tonnage from a quality operator. I should not speak for them, but this is sort of our impression.
Speaker Change: So, you know, the fact that you say, I alluded to the fact that we can do a base rate which is quite healthy with the profit sharing is also a reflection of the quality of this ship.
Speaker Change: and the commercial features, you know, consumption and size and all that. So I think this probably also made a good sense for the counterparty.
structures or contracts if we are able to develop them.
Okay, that makes sense. Second one, more market-related, there's been...
Speaker Change: A lot of optimism about OPEC seeming shift in strategy. You mentioned it in your prepare the marks as well.
Overproduction or certain members can't produce to their quota.
Speaker Change: Based on what they've announced so far, do you have a rough estimate of how much of that do you think will actually enter the market?
Speaker Change: The timing is such, and the equivalent amount of the LCCs that could be added from the last two meetings from Opak.
Speaker Change: I wish I could give you a precise answer but it's a bit too early to tell. I think at the get-go when the additional barrels came to the market, the amounts were quite modest.
Speaker Change: and we believe that that was probably spread out on existing shipments, lifting a little bit more cargo on each keel, maybe rather than having additional, you know, number of ships loathing. So the get-go, it wasn't made that visible.
Speaker Change: There is, of course, some balancing against other Mopek members that have possibly over-produced. But, you know, I think the only people who truly knows this is the insides of Mopek and maybe Saudi Arabia in particular.
Speaker Change: We try to make the sense of it, but then what we do see that you see that has been more cargo in the market.
Speaker Change: I think we just trust a bit in the sentiment and how the customers are behaving and so that there is real, there is more order in the markets.
Okay, thank you, sir.
Thank you. We'll now move on to our next question.
Speaker Change: Our next question comes from the line of Greg Lewis from BTIG, LLC. Please go ahead. Your line is open.
Greg Lewis: Yes, thank you and I'll get an afternoon and thanks for taking my questions. I guess I was kind of curious.
Speaker Change: You know, it's not really been impacting the crude market but at least in Containership market, we're starting to hear about vessel sailing cancellations and you know, just kind of curious, like as we think about fuel spreads.
Speaker Change: as maybe not in anchors, but in some of these other sectors start to see maybe pullbacks and demand any kind of view on what that could maybe do to fuel spreads.
Speaker Change: When you say fuel spread, you mean between very low sulfur and heavier? Exactly, yeah, the scrubber, scrubber, scrubber spread.
Speaker Change: All the sort of scrubber projects were coming on several years ago.
Speaker Change: I do think it's also related to whether people are buying heavy or fuel oil as a feedstock.
Speaker Change: So, maybe to the surprise of many, but there's the more diesel man demand and what people expected as of late as well. So, maybe that has compressed part of this. So, I think it's a mix of these things without being able to give you a very sort of precise number.
Greg Lewis: Okay, great. And my other one is a little macroeat though. You know, it's interesting as you look at the oil curve for Brent, you know, for forever. It's kind of been in backwardated and then about 30 days ago.
Greg Lewis: You know, it started to move in Contango, you know, not in 26, but like in 28 and then really in the last week. You've now seen like oil in Contango like a year out. You know, just as you think about, you know, what that can do to the to the tank or market, realizing that it's only been a couple of weeks since this has happened. Any kind of thoughts on, you know, if we continue to see this Contango curve. [inaudible]
Greg Lewis: Hold, you know, how that could impact, you know, demand for VLCCs, you know, speed vessels, maybe storage, it kind of just curious on your views on that, realizing that it's really only happened in the last couple of weeks.
Greg Lewis: I think typically, if the contango widens or increases, it could drive some floating storage.
Greg Lewis: But there's no room for that activity to happen right now, but if that trend becomes stronger and wider, you will see more activity of people, of course, story more.
Okay, thank you.
Thank you. We'll now move on to our next question.
Speaker Change: And next question comes from the line of Omar Nokta from Jeffries. Please go ahead, your line is open.
Omar Nocta: Thank you. Hi, it's Vine. Good afternoon. A couple of kind of bigger picture questions also just more on the macro or perhaps just a market on VLCCs. Obviously, OPEC bringing back volumes and
Omar Nocta: What extent remains to be seen as you mentioned? We also talked a little bit about the potential for you know these open barrels coming to market perhaps because of in part because say the Atlantic base and there's been a bit of a void. Just wanted to ask as you think about. .
Omar Nocta: The market has moved here over the next several months, especially into the seasonally softer summer period. Do you think the OPEC volumes coming in are strong enough to push this market higher and offset the potential Atlantic base in the decline?
Omar Nocta: Based on sort of the plan that we read this in the cards, we think that could be the case so that we will then potentially have a quite robust summer market which is not a typical seasonal event.
Omar Nocta: So, when I talk about Atlantic, of course, it's mainly US shale, and that sort of is still growing at a much smaller level. It's probably going to be a bit of, you know, in Texas because Brazil and Guyana is growing.
Omar Nocta: and you also have quite a lot of new oil coming off the West Coast or Canada and almost half of that is going on the ecstasy to the faries.
Omar Nocta: It's not the same speed as you had in the US now for a few years. So, I do think this created an additional argument for, like to say, this is an opportunity for us to...
Omar Nocta: So, I would think it's in their interest also to ensure that they can deliver feedstock to these and not sort of have a competition with other suppliers.
Speaker Change: Yeah, thanks. And I guess part of the bullish thesis for VLCC this year has been the sanctioning so many shifts and the tightening of that capacity, especially as it's been primarily due to the moving Iranian barrels. How do you think this market kind of...
Speaker Change: How does this market shake out, for instance, if the U.S. and Iran reach a long-term agreement? And Iran's volumes are maybe welcome back into the open market. And I think it's the OCC market.
reacts to that.
Speaker Change: I think that's a good question. We look at these two broad scenarios. One is, as you alluded, that there is an agreement in place with Iran and the US.
Speaker Change: and sanctions are lifted, and that means that Iran can access the compliant market for freight, which is cheaper per barrel to transport them in the shadow of the sanctioned markets.
Truly, you know, it's only positive for these.
Speaker Change: and Iranian production is being driven down to the floor. It means that somebody else will have to step in and supply that loss. And that will very likely be the other Middle East producers, maybe especially Saudi and UA.
Thank you for your time.
Okay, but that's very clear. Thank you. Fine Thank you.
Thank you.
Speaker Change: So, thank you very much to all for listening in and following DHT as most appreciated and wishing you all a good day at.
Speaker Change: This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.
and Svein Harfjeld.
[inaudible] and thank you very much for your time
Svein Harfjeld, Svein Harfjeld, Svein Harfjeld
Svein Harfjeld, Svein Harfjeld, Svein Harfjeld
Svein Harfjeld, Svein Harfjeld, Svein Harfjeld
and Svein Harfjeld.
[inaudible] I've got you, I've got you,
Laila Halvorsen, Svein Harfjeld
[inaudible]