DHT Q4 2025 DHT Holdings Inc Earnings Call | AllMind AI Earnings | AllMind AI
Q4 2025 DHT Holdings Inc Earnings Call
Operator: Good day, and thank you for standing by. Welcome to the Q4 2025 DHT Holdings, Inc. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised, today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Laila Halvorsen, CFO. Please go ahead.
Speaker #1: Day, and thank you for standing by. Welcome to the Q4 2025 DHT Holdings, Inc. earnings conference call. At this time, all participants are in a listen-only mode.
Speaker #1: 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 one and one on your telephone.
Speaker #1: You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised today's conference is being recorded.
Speaker #1: I'd now like to hand the conference over to your first speaker today, Laila Halvorsen, CFO. Please go ahead.
Speaker #1: ahead. Thank
Laila Halvorsen: Thank you. Good morning, and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings Q4 2025 Earnings Call. I'm joined by DHT's President and CEO, Svein Moxnes Harfjeld. As usual, we will go through financials and some highlights before we open up for your questions. A link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available on our website, dhtankers.com, until 12 February. In addition, our earnings press release will be available on our website and on the SEC Edgar system as an exhibit to our Form 6-K. As a reminder, on this conference call, we will discuss matters that are forward-looking in nature.
Laila Halvorsen: Thank you. Good morning, and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings Q4 2025 Earnings Call. I'm joined by DHT's President and CEO, Svein Moxnes Harfjeld. As usual, we will go through financials and some highlights before we open up for your questions. A link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available on our website, dhtankers.com, until 12 February. In addition, our earnings press release will be available on our website and on the SEC Edgar system as an exhibit to our Form 6-K. As a reminder, on this conference call, we will discuss matters that are forward-looking in nature.
Speaker #2: Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings' fourth quarter 2025 earnings. President and CEO, Svein Marksnes Harfjeld.
Speaker #2: As usual, we will go through financials and some highlights before we open up for your questions. A link to the slide deck can be found on our website, dhtankers.com.
Speaker #2: Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available on our website, dhtankers.com, until February 12th.
Speaker #2: In addition, our earnings press release will be available on our website and on the SSE 6K. As a reminder, on this conference call, we will discuss matters that are forward-looking in nature.
Speaker #2: These forward-looking statements are based on our current expectations about future events as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements.
Laila Halvorsen: These forward-looking statements are based on our current expectations about future events, as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements. We urge you to read our periodic report available on our website and on the SEC Edgar system, including the risk factors in these reports, for more information regarding risks that we face. As usual, we will start the presentation with some financial highlights. In the fourth quarter of 2025, we achieved revenues on TCE basis of $118 million and adjusted EBITDA of $95 million. Net income came in at $66 million, equal to $0.41 per share. Vessel operating expenses for the quarter were $17.1 million, and G&A for the quarter was $5.6 million, which included approximately $0.6 million in non-recurring project costs.
Laila Halvorsen: These forward-looking statements are based on our current expectations about future events, as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements. We urge you to read our periodic report available on our website and on the SEC Edgar system, including the risk factors in these reports, for more information regarding risks that we face. As usual, we will start the presentation with some financial highlights. In the fourth quarter of 2025, we achieved revenues on TCE basis of $118 million and adjusted EBITDA of $95 million. Net income came in at $66 million, equal to $0.41 per share. Vessel operating expenses for the quarter were $17.1 million, and G&A for the quarter was $5.6 million, which included approximately $0.6 million in non-recurring project costs.
Speaker #2: We urge you to read our periodic report available on our website and on the SSE EDGAR system, including the risk factors in these reports, for more information regarding risks that we face.
Speaker #2: As usual, we will start the presentation with some financial highlights. In the fourth quarter of 2025, we achieved revenues on TCE basis of 118 million, and adjusted EBITDA of 95 million.
Speaker #2: Net income came in at 66 million, equal to 41 cents per share. Vessel operating expenses for the quarter were 17.1 million, and G&A for the quarter was 5.6 million, which included approximately 0.6 million in non-recurring project costs.
Speaker #2: In terms of market performance, our vessels trading in the spot market earned an average of 69,500 dollars per day, while the vessels on time shorters achieved 49,400 dollars per day.
Laila Halvorsen: In terms of market performance, our vessels trading in the spot market earned an average of $69,500 per day, while the vessels on time charters achieved $49,400 per day. The average combined TCE for the fleet in the quarter was $60,300 per day. For the full year of 2025, we achieved revenues on TCE basis of $369 million and adjusted EBITDA of $278 million. Net income for 2025 was $211 million, equal to $1.31 per share. Adjusted for the gains related to sale of vessels, adjusted net income was $158 million, equal to $0.99 per share, marking another strong year for DHT. We have a rock-solid balance sheet with low leverage and strong liquidity.
Laila Halvorsen: In terms of market performance, our vessels trading in the spot market earned an average of $69,500 per day, while the vessels on time charters achieved $49,400 per day. The average combined TCE for the fleet in the quarter was $60,300 per day. For the full year of 2025, we achieved revenues on TCE basis of $369 million and adjusted EBITDA of $278 million. Net income for 2025 was $211 million, equal to $1.31 per share. Adjusted for the gains related to sale of vessels, adjusted net income was $158 million, equal to $0.99 per share, marking another strong year for DHT. We have a rock-solid balance sheet with low leverage and strong liquidity.
Speaker #2: TCE for the fleet in the quarter—the average combined—was $60,300 per day. For the full year of 2025, we achieved revenues on a TCE basis of $369 million, and adjusted EBITDA of $278 million.
Speaker #2: Net income for 2025 was 211 million, equal to 1 dollar and 31 cents per the gains, related to sale of vessels, adjusted net income was 158 million, equal to 99 cents per share.
Speaker #2: Another strong year for Marking DHT. We have a rock-solid balance sheet with low leverage and strong liquidity. At the end of the fourth quarter, total liquidity was $189 million.
Laila Halvorsen: At the end of the fourth quarter, total liquidity was $189 million, consisting of $79 million in cash and $110.5 million available under two of our revolving credit facilities. In December, we drew on this RCF capacity to fund the final installment for our first new building, which was delivered on 2 January. This drawdown was repaid in January when we drew on the new building facility. Following these transactions, current availability under our RCF stands at $171.9 million. At quarter end, financial leverage was 17.6% based on market values for the fleet, and net debt was just under $16 million per vessel, which is well below estimated residual values. Looking at our cash flow, we began the quarter with $89, sorry, $81 million in cash. From operations, we generated $95.3 million in EBITDA.
Laila Halvorsen: At the end of the fourth quarter, total liquidity was $189 million, consisting of $79 million in cash and $110.5 million available under two of our revolving credit facilities. In December, we drew on this RCF capacity to fund the final installment for our first new building, which was delivered on 2 January. This drawdown was repaid in January when we drew on the new building facility. Following these transactions, current availability under our RCF stands at $171.9 million. At quarter end, financial leverage was 17.6% based on market values for the fleet, and net debt was just under $16 million per vessel, which is well below estimated residual values. Looking at our cash flow, we began the quarter with $89, sorry, $81 million in cash. From operations, we generated $95.3 million in EBITDA.
Speaker #2: Consisting of 79 million in cash and 110 and a half million available under two of our evolving credit facilities. In December, we drew on this RCF capacity to fund the final installment for our first new building, which was delivered on January 2nd.
Speaker #2: This drawdown was repaid in January when we drew on the new building facility. Following these transactions, current available availability under our RCF stands at 171.9 million.
Speaker #2: At 17.6%, based on market values for the fleet. And net debt vessel, which is well below estimated residual values. Looking at our cash flow, we began the quarter with 89, sorry, 81 million in cash.
Speaker #2: From operations, we generated just under $16 million per week and $95.3 million in EBITDA. Ordinary debt repayment and cash interest totaled $13.2 million. And $28.9 million was distributed to shareholders through a cash dividend.
Laila Halvorsen: Ordinary debt repayment and cash interest totaled $13.2 million, and $28.9 million was distributed to shareholders through a cash dividend. $97.6 million was deployed towards vessels during the quarter, which included the delivery of DHT Nokota, our 2018 built secondhand acquisition. We also issued $169.4 million in long-term debt associated with the delivery of DHT Nokota and the delivery of our first new building, DHT Antelope. In addition, we invested $107.8 million in our new building program. Changes in working capital and other items amounted to $19.3 million, and the quarter ended with $79 million in cash. With that, I will turn the call over to Svein.
Laila Halvorsen: Ordinary debt repayment and cash interest totaled $13.2 million, and $28.9 million was distributed to shareholders through a cash dividend. $97.6 million was deployed towards vessels during the quarter, which included the delivery of DHT Nokota, our 2018 built secondhand acquisition. We also issued $169.4 million in long-term debt associated with the delivery of DHT Nokota and the delivery of our first new building, DHT Antelope. In addition, we invested $107.8 million in our new building program. Changes in working capital and other items amounted to $19.3 million, and the quarter ended with $79 million in cash. With that, I will turn the call over to Svein.
Speaker #2: 97.6 million was deployed towards vessels during the quarter, which included the delivery of DHT Nakota, our 2018-built quarter end, financial leverage was second-hand acquisition.
Speaker #2: We also issued 169.4 million in long-term debt associated with the delivery of DHT Nakota and the delivery of our first new building, DHT Antelope.
Speaker #2: In addition, we invested 107.8 million in our new building program. Changes in working capital and other items amounted to 19.3 million, and the quarter 79 million in cash.
Speaker #2: With that, I will turn the call over to
Speaker #2: Svein. Thank you,
Svein Moxnes Harfjeld: Thank you, Laila. I will now go through our quarterly highlights. We entered into an agreement in June last year to acquire a large quality VLCC, built in 2018 at Hyundai. We took delivery of the vessel in November, an excellent timing as the freight market was roaring. She's named DHT Nokota and trades in the spot markets. As we have alluded to in numerous okay communications, our plan has been to divest our three older ships built in 2007. One of the considerations was timely fleet modernization, selling the oldest vessels in a strong market and replace these vessels with our new building program, with four new vessels entering our fleet during the first half of this year. This new building program was contracted some two years ago when the order book was about 2% of total capacity.
Svein Moxnes Harfjeld: Thank you, Laila. I will now go through our quarterly highlights. We entered into an agreement in June last year to acquire a large quality VLCC, built in 2018 at Hyundai. We took delivery of the vessel in November, an excellent timing as the freight market was roaring. She's named DHT Nokota and trades in the spot markets. As we have alluded to in numerous okay communications, our plan has been to divest our three older ships built in 2007. One of the considerations was timely fleet modernization, selling the oldest vessels in a strong market and replace these vessels with our new building program, with four new vessels entering our fleet during the first half of this year. This new building program was contracted some two years ago when the order book was about 2% of total capacity.
Speaker #3: Laila. I will now go through our quarterly
Speaker #3: June last year, we acquired a large, high-quality real estate vessel built in 2018 at Hyundai. We took delivery of the vessel in November—an excellent timing, as the freight market was roaring.
Speaker #3: She's named DHT Nakota and trades in the spot market. As we have alluded to in numerous communications, our plan has been to divest our three older ships, built in 2007.
Speaker #3: One of the considerations was timely fleet modernization, selling the oldest vessels in the strong market, and replacing these vessels with our newbuilding program of four new vessels entering our fleet during the first half of this year.
Speaker #3: These new building programs were contracted some two years ago when the order book was about 2% of total ended with capacity. We entered into agreement to sell DHT China and DHT Europe during the quarter for a combined price of 101.6 million.
Svein Moxnes Harfjeld: We entered into agreement to sell DHT China and DHT Europe during the quarter for a combined price of $101.6 million. The Europe was delivered the last day of January, and we expect to deliver the DHT China later this quarter. We expect to book a combined gain of about $60 million during the first quarter. Cash proceeds should come in about $95 million. The following events took place subsequently to the quarter end. We took delivery of the first of our four new buildings on 2 January. She's named DHT Antelope, setting the tone for this new series called the Antelope Class. She is demonstrating excellent fuel economics during her maiden voyage, so far exceeding our expectations. The remaining three ships will deliver, with two in March and one in June.
Svein Moxnes Harfjeld: We entered into agreement to sell DHT China and DHT Europe during the quarter for a combined price of $101.6 million. The Europe was delivered the last day of January, and we expect to deliver the DHT China later this quarter. We expect to book a combined gain of about $60 million during the first quarter. Cash proceeds should come in about $95 million. The following events took place subsequently to the quarter end. We took delivery of the first of our four new buildings on 2 January. She's named DHT Antelope, setting the tone for this new series called the Antelope Class. She is demonstrating excellent fuel economics during her maiden voyage, so far exceeding our expectations. The remaining three ships will deliver, with two in March and one in June.
Speaker #3: The Europe was delivered the last day of January, and the expected delivery of the DHT China is later this quarter. We expect to book a combined gain of about $60 million during the first quarter.
Speaker #3: Cash proceeds should come in at about $95 million. The following events took place subsequent to the quarter end. We took delivery of the first of our four new buildings on January 2nd.
Speaker #3: She's named DHT Antelope, setting the tone for this new series called the Antelope class. She's demonstrating excellent fuel economics during her maiden voyage, so far exceeding our expectations.
Speaker #3: The remaining three ships will deliver with two in March and This is a fully funded project and no new shares will be issued in this connection.
Svein Moxnes Harfjeld: This is a fully funded project and no new shares will be issued in this connection. We extended a time charter for DHT Harrier with a 5-year contract at $47,500 per day. The new rate commenced at the end of January. The customer has the option to extend for two individual additional years at $49,000 and $50,000, respectively. Lastly, we entered into agreement to sell the DHT Bauhinia, our last vessel built in 2007. The price is $51.5 million, and the vessel is debt-free. We expect to deliver her to her new owners in June, July this year, and expect to record a gain of $34.2 million from the sale. Back to you, Laila.
Svein Moxnes Harfjeld: This is a fully funded project and no new shares will be issued in this connection. We extended a time charter for DHT Harrier with a 5-year contract at $47,500 per day. The new rate commenced at the end of January. The customer has the option to extend for two individual additional years at $49,000 and $50,000, respectively. Lastly, we entered into agreement to sell the DHT Bauhinia, our last vessel built in 2007. The price is $51.5 million, and the vessel is debt-free. We expect to deliver her to her new owners in June, July this year, and expect to record a gain of $34.2 million from the sale. Back to you, Laila.
Speaker #3: We extended a time shorter for DHT Harrier with a five-year contract at 47,500 per day. The new rate commenced at the end of January.
Speaker #3: The customer has the option to extend for two individual additional years at 49 and 50,000, respectively. Lastly, we entered into agreement to sell the DHT Bohemia, our last vessel built in 2007.
Speaker #3: The price is 51.5 million, and the vessel is debt-free. We expect to deliver her to her new owners in June, July this year, and expect to record a gain of 34.2 million from the sale.
Speaker #3: Back to you,
Speaker #3: Laila.
Speaker #1: Thank
Laila Halvorsen: Thank you. In line with our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividend, the board has approved a dividend of $0.41 per share for Q4 2025. This marks our 64th consecutive quarterly cash dividend. The shares will trade ex-dividend on 19 February, and the dividend will be paid on 26 February to shareholders of record as of 19 February. On the left side of the slide, we present our estimated P&L and cash break-even levels for 2026. Our spot cash break-even for the year is estimated at $17,500 per day, which reflects the sale of our three oldest vessels and seven special surveys scheduled during the year. This figure captures all true cash costs.
Laila Halvorsen: Thank you. In line with our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividend, the board has approved a dividend of $0.41 per share for Q4 2025. This marks our 64th consecutive quarterly cash dividend. The shares will trade ex-dividend on 19 February, and the dividend will be paid on 26 February to shareholders of record as of 19 February. On the left side of the slide, we present our estimated P&L and cash break-even levels for 2026. Our spot cash break-even for the year is estimated at $17,500 per day, which reflects the sale of our three oldest vessels and seven special surveys scheduled during the year. This figure captures all true cash costs.
Speaker #1: In line with our capital allocation policy, paying out 100% of ordinary net income as a quarterly cash dividend, the board has approved a dividend of $0.41 per share for the fourth quarter of 2025.
Speaker #1: This marks our 64th consecutive quarterly cash dividend. The shares will trade ex-dividend on February 19th, and the dividend will be paid on February 26th to shareholders of record as of February 19th.
Speaker #1: On the left side of the slide, we present our estimated P&L and cash break-even levels for break-even for the year is estimated at 17,500 per day, which reflects the sale of our three oldest vessels and seven special survey scheduled during the year.
Speaker #1: This figure captures all true cash costs. The difference between our P&L and cash break-even is estimated at 6,700 per day, totaling about 56 year.
Laila Halvorsen: The difference between our P&L and cash break even is estimated at $6,700 per day, totaling about $56 million for this year. This discretionary cash flow will remain within the company and be allocated for general corporate purposes. On the right side of the slide, we illustrate the accumulated dividends since we updated our capital allocation policy in Q3 of 2022. The total accumulated amount is $3.34 per share, reflecting strong shareholder returns during a period of share price appreciation. Finally, an update on bookings to date for Q1 of 2026. We expect 797 time charter dates covered for the first quarter at an average rate of $43,300 per day.
Laila Halvorsen: The difference between our P&L and cash break even is estimated at $6,700 per day, totaling about $56 million for this year. This discretionary cash flow will remain within the company and be allocated for general corporate purposes. On the right side of the slide, we illustrate the accumulated dividends since we updated our capital allocation policy in Q3 of 2022. The total accumulated amount is $3.34 per share, reflecting strong shareholder returns during a period of share price appreciation. Finally, an update on bookings to date for Q1 of 2026. We expect 797 time charter dates covered for the first quarter at an average rate of $43,300 per day.
Speaker #1: This discretionary cash flow will remain within the company and be allocated for general corporate purposes. On the right side of the slide, dividends since we updated our capital allocation policy in the third quarter of we illustrate the accumulated 2022.
Speaker #1: The total accumulated amount is $3.34 per share, reflecting strong shareholder returns during a period of share price appreciation. an update on bookings to date Finally, for the first quarter of 2026.
Speaker #1: We expect 797 time shorter dates covered for the first quarter, at an average rate of 43,300 per day. This rate includes profit sharing for the month of January, and the base rate only for the months of February, March, for feature.
Laila Halvorsen: This rate includes profit sharing for the month of January and the base rate only for the months of February and March for contracts with profit sharing feature. We anticipate 1,195 spot days for the quarter, of which 76% have already been booked at an average rate of $78,900 per day. The spot P&L break even for the quarter is estimated to be $18,300 per day. And then I'll turn the call back to Svein.
Laila Halvorsen: This rate includes profit sharing for the month of January and the base rate only for the months of February and March for contracts with profit sharing feature. We anticipate 1,195 spot days for the quarter, of which 76% have already been booked at an average rate of $78,900 per day. The spot P&L break even for the quarter is estimated to be $18,300 per day. And then I'll turn the call back to Svein.
Speaker #1: We anticipate 1,195 spot days for the quarter, of which 76% have already been booked, at an average rate of 78,900 per day. The spot P&L break-even for the quarter is estimated to be 18,300 per day.
Speaker #1: And then I'll turn the call back to Svein.
Speaker #3: Thanks. We have repeatedly addressed the fleet demographics and how it creates an important and robust pillar in our constructive market outlook. We estimate the current sailing real estate fleet to ships, net of ships engaged count 897 in permanent floating fleet, 427 storage.
Svein Moxnes Harfjeld: Thanks. We have repeatedly addressed the fleet demographics and how it creates an important and robust pillar in our constructive market outlook. We estimate the current sailing VLCC fleet to count 897 ships, net of ships engaged in permanent floating storage. Of this fleet, 427 ships, or 46% of the fleet, will be older than 15 years by the end of this year. Similarly, 199 ships, or 20% of the fleet, will be older than 20 years. And extraordinarily, 49 ships, equal to just over 5% of the fleet, will be older than 25 years. The sanctioned VLCC fleet counts 151 vessels, of which 105 are older than 20. Twenty-two of the sanctioned ships that are younger than 20 are owned by NITC, the Iranian state-owned shipping line.
Svein Moxnes Harfjeld: Thanks. We have repeatedly addressed the fleet demographics and how it creates an important and robust pillar in our constructive market outlook. We estimate the current sailing VLCC fleet to count 897 ships, net of ships engaged in permanent floating storage. Of this fleet, 427 ships, or 46% of the fleet, will be older than 15 years by the end of this year. Similarly, 199 ships, or 20% of the fleet, will be older than 20 years. And extraordinarily, 49 ships, equal to just over 5% of the fleet, will be older than 25 years. The sanctioned VLCC fleet counts 151 vessels, of which 105 are older than 20. Twenty-two of the sanctioned ships that are younger than 20 are owned by NITC, the Iranian state-owned shipping line.
Speaker #3: ships or 46% of the Of this fleet will be older than 15 years by the end of this year. Similarly, 199 ships or 20% of the fleet will be older than 20 years.
Speaker #3: An extraordinarily 49 ships equal to just over 5% of the fleet will be older than 25 years. The sanctioned real estate fleet counts 151 vessels, of which 105 are older than 20.
Speaker #3: Twenty-two of the sanctioned ships that are younger than 20 years are owned by NITC, the Iranian state-owned shipping line. There are discussions as to whether the sanctioned fleet can re-enter the compliant market.
Svein Moxnes Harfjeld: There are discussions as to whether the sanctioned fleet can reenter the compliant market. At first, we would state that, say, for some very minor exceptions, there are hardly any commercial opportunities once a VLCC passes the 20-year mark in the compliant market. This is different for smaller ship classes, with the general rule being that retirement age for ships gets older as ship sizes get smaller. A key message about the VLCC fleet: if and when the sanctioned oil markets become compliant, this could eventually make the sanctioned fleet redundant. Further, there are discussions whether the order book is growing into oversupply territory. We would argue, no. The reasons are illustrated here with a confirmed order book of 171 ships delivering over the next three years.
Svein Moxnes Harfjeld: There are discussions as to whether the sanctioned fleet can reenter the compliant market. At first, we would state that, say, for some very minor exceptions, there are hardly any commercial opportunities once a VLCC passes the 20-year mark in the compliant market. This is different for smaller ship classes, with the general rule being that retirement age for ships gets older as ship sizes get smaller. A key message about the VLCC fleet: if and when the sanctioned oil markets become compliant, this could eventually make the sanctioned fleet redundant. Further, there are discussions whether the order book is growing into oversupply territory. We would argue, no. The reasons are illustrated here with a confirmed order book of 171 ships delivering over the next three years.
Speaker #3: At first, we would state that, say, for some very minor exceptions, there are hardly any commercial opportunities once a real estate passes the 20-year mark in the compliant market.
Speaker #3: This is different for smaller ship classes, with the general rule being that the retirement age of ships gets older as ship sizes get smaller. A key message about the real estate fleet: if and when the sanctioned oil markets become compliant, this could eventually make the sanctioned fleet discussions focus on whether the order book is growing into oversupply territory.
Speaker #3: We would argue no. The reasons are illustrated here with a confirmed order book of 171 ships delivering over the next three years. There are some discussions at letter of intent stages which will likely add some additional orders for the very end of '28, but mostly in 2029.
Svein Moxnes Harfjeld: There are some discussions at letter of intent stages, which will likely add some additional orders for the very end of 2028, but mostly in 2029. Delivery slots for new VLCCs on offer now are in 2029, hence the 3-year delivery time will unlikely change. Fast forward to the end of 2029, and assuming no scrapping, we will have 528 VLCCs older than 15 and 303 older than 20. These numbers should be put in perspective with the order book. In short, we believe the supply squeeze to be real. As you may have read in the news, a fundamental shift in the fleet ownership is taking place, with fleet consolidation by private actors gaining meaningful traction.
Svein Moxnes Harfjeld: There are some discussions at letter of intent stages, which will likely add some additional orders for the very end of 2028, but mostly in 2029. Delivery slots for new VLCCs on offer now are in 2029, hence the 3-year delivery time will unlikely change. Fast forward to the end of 2029, and assuming no scrapping, we will have 528 VLCCs older than 15 and 303 older than 20. These numbers should be put in perspective with the order book. In short, we believe the supply squeeze to be real. As you may have read in the news, a fundamental shift in the fleet ownership is taking place, with fleet consolidation by private actors gaining meaningful traction.
Speaker #3: Delivery slots for new real estate on offer now are in 2029, hence the three-year delivery time will unlikely change. Fast forward to the end of 2029, and assuming no scrapping, we will have 528 real estates older than older than 20.
Speaker #3: These numbers should be put in 15 and 303 perspective with the order book. In short, we believe the supply squeeze to be real. As you may have read in the news, a fundamental shift in the fleet ownership is taking place with actors gaining meaningful traction.
Speaker #3: We can say with confidence that this is taking place, and already making an impact. Both on freight rates in the spot market, customer demand for time shorters, and values of second-hand real estates.
Svein Moxnes Harfjeld: We can say with confidence that this is taking place and already making an impact, both on freight rates in the spot market, customer demand for time charters, and values of secondhand VLCCs. We estimate that the aggregators to have gained control of some 120 ships, and we expect their efforts to continue, and in not too long, to control at least 25% of the compliant tramping VLCC fleet, a critical market share. This consolidation is shifting the pricing dynamics and is putting pressure on timely availability of ships. As end users increasingly are taking note of this trend, we see rising interest from customers seeking to secure reliability, a reliability that increasingly will command a premium. As crude oil is a feedstock business, one should not expect this consolidation to be trade prohibitive.
Svein Moxnes Harfjeld: We can say with confidence that this is taking place and already making an impact, both on freight rates in the spot market, customer demand for time charters, and values of secondhand VLCCs. We estimate that the aggregators to have gained control of some 120 ships, and we expect their efforts to continue, and in not too long, to control at least 25% of the compliant tramping VLCC fleet, a critical market share. This consolidation is shifting the pricing dynamics and is putting pressure on timely availability of ships. As end users increasingly are taking note of this trend, we see rising interest from customers seeking to secure reliability, a reliability that increasingly will command a premium. As crude oil is a feedstock business, one should not expect this consolidation to be trade prohibitive.
Speaker #3: aggregators to have gained control of some 120 We estimate that the ships, and we expect their efforts to continue and in not too long to control at least 25% of the compliant tramping real estate fleet.
Speaker #3: A critical market share. This consolidation is shifting the pricing dynamics and is putting pressure on timely availability of ships. As end users increasingly are taking note of this trend, we see rising interest from customers seeking to secure reliability, a reliability that increasingly will command a premium.
Speaker #3: As crude oil is a feedstock business, one should not expect this consolidation to be trade. Transportation is cheap when measured as a portion of the delivered value of the cargo.
Svein Moxnes Harfjeld: Crude oil transportation is cheap when measured as a portion of the delivered value of the cargo, hence likely disappearing in the oil price. As a reflection of the constructive market view we have held for some time, we are increasing our spot market exposure for our fleet by reducing fixed income contracts, i.e., time charters. Further, we believe the delivery of our 4 state-of-the-art VLCC new buildings during the first half of this year to be very timely. You will note on this slide that we expect our spot market exposure to reach some 3/4 of our capacity during Q2. This enables us not only to participate in the rewarding spot markets to a greater extent than for some time, but also in due course, develop new time charter contracts at improved rates. As we enter 2026, the VLCC market is undergoing a structural transformation.
Svein Moxnes Harfjeld: Crude oil transportation is cheap when measured as a portion of the delivered value of the cargo, hence likely disappearing in the oil price. As a reflection of the constructive market view we have held for some time, we are increasing our spot market exposure for our fleet by reducing fixed income contracts, i.e., time charters. Further, we believe the delivery of our 4 state-of-the-art VLCC new buildings during the first half of this year to be very timely. You will note on this slide that we expect our spot market exposure to reach some 3/4 of our capacity during Q2. This enables us not only to participate in the rewarding spot markets to a greater extent than for some time, but also in due course, develop new time charter contracts at improved rates. As we enter 2026, the VLCC market is undergoing a structural transformation.
Speaker #3: Hence, likely disappearing in the oil prohibitive. Crude oil price. As a reflection of the constructive market view we have held for some time, we are increasing our spot market exposure for our fleet by reducing fixed income contracts, i.e., time charters.
Speaker #3: Further, we believe the delivery of our four state-of-the-art real estate new buildings during the first half of this year to be very timely. You will note on this slide that we expect our spot market exposure to reach some three-quarters of our capacity during the second quarter.
Speaker #3: This enables us not only to participate in the rewarding spot markets, to a greater extent than for some time, but also in due course develop new time shorter contracts at improved rates.
Speaker #3: As we enter 2026, the real estate market is undergoing a structural transformation. We are navigating a demand, geopolitical volatility, a rapidly aging global fleet, and significant consolidation of the compliant tramping fleet.
Svein Moxnes Harfjeld: We are navigating a perfect storm of strong demand, geopolitical volatility, a rapidly aging global fleet, and significant consolidation of the compliant tramping fleets. At DHT, we are not just observers of this cycle, we are well positioned to benefit from it. We have an excellent fleet in the water and executed timely renewal with state-of-the-art VLCC new buildings delivering into a strong market, financed without issuing a single share. They're increasing market exposure and a clear mandate to return earnings to our shareholders. We look forward to an exciting and rewarding 2026, and with that, we open up for questions. Operator?
Svein Moxnes Harfjeld: We are navigating a perfect storm of strong demand, geopolitical volatility, a rapidly aging global fleet, and significant consolidation of the compliant tramping fleets. At DHT, we are not just observers of this cycle, we are well positioned to benefit from it. We have an excellent fleet in the water and executed timely renewal with state-of-the-art VLCC new buildings delivering into a strong market, financed without issuing a single share. They're increasing market exposure and a clear mandate to return earnings to our shareholders. We look forward to an exciting and rewarding 2026, and with that, we open up for questions. Operator?
Speaker #3: At DHT, we are not just observers of this cycle. We are well-positioned to benefit from it. We have an excellent fleet in the water and executed timely renewal with state-of-the-art real estate new buildings delivering into a strong market, financed without issuing a single share.
Speaker #3: We have increasing market exposure and a clear mandate to return earnings to our shareholders. We look forward to an exciting and rewarding 2026. And with that, we open up for questions.
Speaker #3: Operator.
Speaker #2: Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced.
Operator: Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced, and to withdraw your question, please press star one and one again. Thank you. We will now take the first question, and this is from the line of John Chappell from Evercore ISI. Please go ahead.
Operator: Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced, and to withdraw your question, please press star one and one again. Thank you. We will now take the first question, and this is from the line of John Chappell from Evercore ISI. Please go ahead.
Speaker #2: And to withdraw your question, please press star one and one again. Thank you. We will now take the first question. And this is from the line of John Chapel from Evercore ISI.
Speaker #2: Please go
Speaker #3: Thank you. Putting aside the 11 and 12 together, the commentary on consolidation, and then your increasing spot exposure to 74%—the comment on the aggregator and charters looking for reliability, and the premium associated with that.
Jon Chappell: Thank you. Svein, putting slides 11 and 12 together, the commentary about the consolidation, and then your increasing spot exposure to 74%. The comment on the aggregator and, charters looking for, reliability, and the premium associated with that. When I first read that in the press release last night, it sounded like that was conducive to a much stronger time charter market. We saw one of their Norwegian peers, sign 8 ships at absurd time charter numbers, lacking a better term. So can you help us kind of reconcile those? Do you think that there's gonna be other opportunities like that, even better than what you just renewed the Harrier at, so that spot market exposure increase may be, kind of short term?
Jon Chappell: Thank you. Svein, putting slides 11 and 12 together, the commentary about the consolidation, and then your increasing spot exposure to 74%. The comment on the aggregator and, charters looking for, reliability, and the premium associated with that. When I first read that in the press release last night, it sounded like that was conducive to a much stronger time charter market. We saw one of their Norwegian peers, sign 8 ships at absurd time charter numbers, lacking a better term. So can you help us kind of reconcile those? Do you think that there's gonna be other opportunities like that, even better than what you just renewed the Harrier at, so that spot market exposure increase may be, kind of short term?
Speaker #3: When I first read that in the press release last night, it sounded like that was conducive to a much stronger time charter market. And we saw one of their Norwegian peers sign eight ships at absurd time charter numbers, lacking a better term.
Speaker #3: So can you help us kind of reconcile those? Do you think that there's going to be other opportunities like that, even better than what you just renewed the Harrier at?
Speaker #3: So that spot market exposure is short term.
Svein Moxnes Harfjeld: I can confirm that. So I would say basically all end users or customers now are in the market to secure time charters, and for a variety of tenors, mostly 1, 2, or 3 years. And the rates that they are, you know, being offered are above last term. And you know, the aggregator, so to speak, is not really in the market to offer ships for time charter, at least not as we have seen, and we doubt that it is happening. So it's really the remainder of owners that potentially will consider this. And I think today there are rumors of a 1-year charter at $85,000 a day, so we'll have to see if that happens. But that, I think, is on subs apparently.
Svein Moxnes Harfjeld: I can confirm that. So I would say basically all end users or customers now are in the market to secure time charters, and for a variety of tenors, mostly 1, 2, or 3 years. And the rates that they are, you know, being offered are above last term. And you know, the aggregator, so to speak, is not really in the market to offer ships for time charter, at least not as we have seen, and we doubt that it is happening. So it's really the remainder of owners that potentially will consider this. And I think today there are rumors of a 1-year charter at $85,000 a day, so we'll have to see if that happens. But that, I think, is on subs apparently.
Speaker #4: I can confirm that. So I would say basically all end users or customers now are in the market to secure time charters, and for a variety of tenors—mostly one, two, or three years.
Speaker #4: And the rates that they are being offered are above last month. Not really in the market to offer ships for time shorter, at least not as we have seen.
Speaker #4: And we doubt that it is happening. So it's really the remainder of owners that potentially will consider this. And I think today there are rumors of a one-year shorter at $85,000 a day.
Speaker #4: To see if that happens. But that, I think, so what we'll have is on subs, apparently. So that's a reflection of a step up from the last one on one year.
Svein Moxnes Harfjeld: So that's a reflection of a step up from the last one on one year. And also, we are aware of customers, you know, bidding on three-year charters, certainly at numbers quite above what you would assume to be lost on. So I think in general, you know, customers are a bit worried about reliability and not really having access to ships or potentially be held hostage to a market where ships are being held back for some reason, right? So it's a very interesting dynamic, and it's already sort of taking shape. So we already see the contours of, you know, how this is working out.
Svein Moxnes Harfjeld: So that's a reflection of a step up from the last one on one year. And also, we are aware of customers, you know, bidding on three-year charters, certainly at numbers quite above what you would assume to be lost on. So I think in general, you know, customers are a bit worried about reliability and not really having access to ships or potentially be held hostage to a market where ships are being held back for some reason, right? So it's a very interesting dynamic, and it's already sort of taking shape. So we already see the contours of, you know, how this is working out.
Speaker #4: And also we are aware of customers bidding on three-year shorters, certainly at numbers quite above what you would assume to be last one. So I think in general, customers are a bit worried about reliability and not potentially being held hostage to a market where ships are being held back for some reason, right?
Speaker #4: So it's a very interesting dynamic. And it's already sort of taking shape. So we already see the contours of how this is working out.
Speaker #3: Okay. And then you've done a deep dive on the supply side, so there's no reason to really rehash that. But the commentary on the last slide about demand, it looks like global oil demand growth is kind of stabilizing around 1%.
Jon Chappell: Okay, and then just you've done a deep dive on the supply side, so there's no reason to really rehash that. But the commentary on the last slide about demand, it looks like global oil demand growth is kind of stabilizing around 1%, and there's a lot of talk about the market becoming oversupplied, you know, with OPEC production at the current levels and China really being the only kind of incremental buyer. Is that demand commentary more about ton mile demand or about disruption, sanctioned vessels, new trade routes, or is it really more of a commentary on just an underlying robust consumption?
Jon Chappell: Okay, and then just you've done a deep dive on the supply side, so there's no reason to really rehash that. But the commentary on the last slide about demand, it looks like global oil demand growth is kind of stabilizing around 1%, and there's a lot of talk about the market becoming oversupplied, you know, with OPEC production at the current levels and China really being the only kind of incremental buyer. Is that demand commentary more about ton mile demand or about disruption, sanctioned vessels, new trade routes, or is it really more of a commentary on just an underlying robust consumption?
Speaker #3: And there's a lot of talk about the market becoming oversupplied. With OPEC production at the current levels and China really being the only kind of incremental buyer, is that demand commentary more about ton mile demand, more about disruption, sanctioned vessels, new trade routes, or is it really more of a commentary on just an underlying robust consumption?
Speaker #4: I are presented and how they're analyzed. So when the 1% figure is referred to, that's think it's a bit how numbers a number over total liquids, i.e., roughly 83 million barrels a day of crude and remaining being sort of liquids taking that number to call it 103 million.
Svein Moxnes Harfjeld: I think it's a bit, you know, how numbers are presented and how they're analyzed. So when the 1% figure is referred to, that's a number over total liquids, i.e., roughly, you know, 83 million barrels of their crude and the remaining being other liquids, taking that number to call it 103 million. The reality is that seaborne crude oil transportation is today roughly around 41 million barrels a day, and the additional 1 million barrels of crude oil coming to the market is now basically all of it will be seaborne. So you have to look at that number over 41 million barrels, not over 103 million barrels. And if you do that, that's roughly a 2.5% demand growth, right?
Svein Moxnes Harfjeld: I think it's a bit, you know, how numbers are presented and how they're analyzed. So when the 1% figure is referred to, that's a number over total liquids, i.e., roughly, you know, 83 million barrels of their crude and the remaining being other liquids, taking that number to call it 103 million. The reality is that seaborne crude oil transportation is today roughly around 41 million barrels a day, and the additional 1 million barrels of crude oil coming to the market is now basically all of it will be seaborne. So you have to look at that number over 41 million barrels, not over 103 million barrels. And if you do that, that's roughly a 2.5% demand growth, right?
Speaker #4: The reality is that seaborne crude oil transportation is today roughly around 41 million barrels a day. And the additional 1 million barrels of crude oil coming to the market is now basically all of it will be seaborne.
Speaker #4: So you have to look at that number over 41 million barrels, not over 103 million barrels. And if you do that, that's roughly a two and a half percent demand growth, right?
Speaker #4: And then, of course, it's the play of distances, as you allude to. Of course, the Middle East now has more oil in the market. It's not as long transportation distances as some of the Atlantic crude.
Jon Chappell: Mm-hmm.
Jon Chappell: Mm-hmm.
Svein Moxnes Harfjeld: Then, of course, it's the play of distances, as you allude to. Of course, Middle East now, you know, having more oil in the market, is not as long transportation distances as some of the Atlantic crude. So you see now the US production this year is probably, I would say, a bit sideways, but, you know, from conversations, understanding of some of the majors and consolidation in the US, they are bringing efficiency and cost down, which means they will also likely expand production. Guyana, of course, is growing fast, and we expect also Brazil to grow, quite meaningfully this year. So I think all this combined, we have reasons to be, you know, positive on the demand side growth as well.
Svein Moxnes Harfjeld: Then, of course, it's the play of distances, as you allude to. Of course, Middle East now, you know, having more oil in the market, is not as long transportation distances as some of the Atlantic crude. So you see now the US production this year is probably, I would say, a bit sideways, but, you know, from conversations, understanding of some of the majors and consolidation in the US, they are bringing efficiency and cost down, which means they will also likely expand production. Guyana, of course, is growing fast, and we expect also Brazil to grow, quite meaningfully this year. So I think all this combined, we have reasons to be, you know, positive on the demand side growth as well.
Speaker #4: So you see now the US production this year is probably I would say a bit sideways, but from conversations and understanding of some of the majors and consolidation in the US, they are bringing efficiency and cost down, which means they will also likely expand production.
Speaker #4: Guyana, of course, is growing costs quite fast. And we expect also Brazil to grow quite meaningfully this year. So I think all these combined, we have reasons to be positive on the demand side, growth as well.
Speaker #4: So but I think the details really is understanding these numbers, the total liquids demand versus the seaborne demand or crude oil.
Svein Moxnes Harfjeld: So but I think the details really is understanding these numbers, the total liquids demand versus the seaborne demand of crude oil.
Svein Moxnes Harfjeld: So but I think the details really is understanding these numbers, the total liquids demand versus the seaborne demand of crude oil.
Jon Chappell: Mm-hmm. Okay, thank you, Svein.
Jon Chappell: Mm-hmm. Okay, thank you, Svein.
Speaker #3: Okay. Thank you,
Speaker #3: Sven. Thank
Operator: Thank you. We'll now take our next question. This is from Frode Mørkedal from Clarksons. Please go ahead.
Operator: Thank you. We'll now take our next question. This is from Frode Mørkedal from Clarksons. Please go ahead.
Speaker #2: you. We'll now take our next question. This is from Froda Markedal from Clarksons. Please go ahead.
Speaker #4: Thank you. Hi, Svein. Hello, Frode. On this aggregator's controlling 25%, can you maybe translate that into a little count, or maybe clarify how you define the compliance fleet?
Frode Mørkedal: Thank you. Hi, Svein, Laila.
Frode Mørkedal: Thank you. Hi, Svein, Laila.
Svein Moxnes Harfjeld: Hello, Frode.
Svein Moxnes Harfjeld: Hello, Frode.
Frode Mørkedal: On this, aggregators controlling 25 percent, can you maybe translate that into-
Frode Mørkedal: On this, aggregators controlling 25 percent, can you maybe translate that into-
Frode Mørkedal: ... That will count, or maybe clarify how you define the compliant fleet. Because when I look at 130, 120 ships, that's just like probably 18% or something like that. So just a clarification on that first.
Frode Mørkedal: ... That will count, or maybe clarify how you define the compliant fleet. Because when I look at 130, 120 ships, that's just like probably 18% or something like that. So just a clarification on that first.
Speaker #4: Because when I look at 130, 120 ships, that's just like probably 18% or something like that. So just a clarification on that first. Yeah. So you have to knock off the sanction fleet, obviously, right?
Svein Moxnes Harfjeld: Yeah. So you have to knock off the sanction fleet, obviously, right? Which is not really a market, business. Then there are quite significant, number of ships that are, state-owned, controlled, and that are really just running a shuttle service, basically, a taxi service for, for their owners. So, you know, China Inc, for one, they control roughly 100 VLCCs, and, you know, quite a significant portion of that fleet is engaged in transporting oil as a cargo service, just from- mainly from the Middle East for two Chinese refiners. You know, Saudi Arabia owns a big fleet, you know, Japan Inc owns a big fleet. So, these ships are not really tramping and are open in the market, all the time.
Svein Moxnes Harfjeld: Yeah. So you have to knock off the sanction fleet, obviously, right? Which is not really a market, business. Then there are quite significant, number of ships that are, state-owned, controlled, and that are really just running a shuttle service, basically, a taxi service for, for their owners. So, you know, China Inc, for one, they control roughly 100 VLCCs, and, you know, quite a significant portion of that fleet is engaged in transporting oil as a cargo service, just from- mainly from the Middle East for two Chinese refiners. You know, Saudi Arabia owns a big fleet, you know, Japan Inc owns a big fleet. So, these ships are not really tramping and are open in the market, all the time.
Speaker #4: Which is not really a market business. Then there are quite significant number of ships that are state-owned controlled and that are really just running a shuttle service, basically a taxi service for their owners.
Speaker #4: So China inked for one day control roughly 100 deals to seize. And quite a significant portion of that fleet is engaged in transporting oil as a cargo service just from mainly from the Middle East for two Chinese refiners.
Speaker #4: Saudi Arabia owns a big fleet. Japan Inc. owns a big fleet. So these ships are not really tramping and are open in the market all the time.
Speaker #4: Some of them might be because of scheduling issues that are free of cargo and being a replacement, stuff like that. But you don't see all of those fleets in the regular spot market.
Svein Moxnes Harfjeld: Some of them might be, you know, because of scheduling issues that are free of cargo and are being replaced and stuff like that, but you don't see all of those fleets in the regular spot market. So when you adjust that, I think, a reasonable number is to think that, that the fleet is somewhere, you know, maybe 600 ships, maybe a little bit smaller even. So, that's why we sort of take the risk at presenting that number. I don't think it's unreasonable to think that, that the 25 percent or the, the compliant tramping fleet, are the one that's gonna be sort of exposed to this consolidation.
Svein Moxnes Harfjeld: Some of them might be, you know, because of scheduling issues that are free of cargo and are being replaced and stuff like that, but you don't see all of those fleets in the regular spot market. So when you adjust that, I think, a reasonable number is to think that, that the fleet is somewhere, you know, maybe 600 ships, maybe a little bit smaller even. So, that's why we sort of take the risk at presenting that number. I don't think it's unreasonable to think that, that the 25 percent or the, the compliant tramping fleet, are the one that's gonna be sort of exposed to this consolidation.
Speaker #4: So when you adjust that, I think a reasonable number is to think that the fleet is somewhere maybe 600 ships, maybe a So that's why we sort of take the risk at presenting that number.
Speaker #4: I don't think it's unreasonable to think that 25% of sort of the compliant tramping fleet are the one that's going to be sort of exposed to these consolidation.
Frode Mørkedal: Okay. Understood. So you're not really saying that they will add even more ships to reach 25? They already have that.
Frode Mørkedal: Okay. Understood. So you're not really saying that they will add even more ships to reach 25? They already have that.
Speaker #5: Understood. So you're not really saying Okay. that they will add even more ships to reach 25? They already have that?
Svein Moxnes Harfjeld: Well, we understand in the market that they are looking to acquire additional ships. And as a company with ships, you know, chances are maybe we also get the old phone call if you want to sell ships, and we're done selling. So I think ambitions are certainly there to do more, so let's see where it ends up.
Svein Moxnes Harfjeld: Well, we understand in the market that they are looking to acquire additional ships. And as a company with ships, you know, chances are maybe we also get the old phone call if you want to sell ships, and we're done selling. So I think ambitions are certainly there to do more, so let's see where it ends up.
Speaker #4: Well, we understand in the market that they are looking to acquire additional ships. And the company with ships, chances are maybe we also get the old phone call if we want to sell ships.
Speaker #4: And we don't sell any. So I think the ambitions are certainly there to do more. So let's see where it ends up.
Speaker #5: Interesting. On that note, I guess there are two questions on that. First, is 25% enough to meaningfully, let's say, shift the market dynamics, and if so, how?
Frode Mørkedal: Interesting. On that note, I guess I have two questions on that. First, is 25% enough to meaningfully, let's say, shift the market dynamics, and how so? You know, what mechanism will it be?
Frode Mørkedal: Interesting. On that note, I guess I have two questions on that. First, is 25% enough to meaningfully, let's say, shift the market dynamics, and how so? You know, what mechanism will it be?
Speaker #5: What mechanism? Will it impact?
Svein Moxnes Harfjeld: I think because if you look at the types of ships that are being acquired, they're predominantly in the 10 to 15-year age bracket. And most of those ships that are being sold have been owned by, you know, owners with maybe 2, 3, 4, 5 ships. And you know, they have occasionally a little bit different behavior in the spot market. If these aggregators are sort of getting all those ships under some sort of commercial umbrella, you will have, I think, a different pricing behavior and a different flow of information, importantly, to the people around, right?
Speaker #4: So big. I think because, if you look, I think at the types of ships that are being acquired, they're predominantly in the 10- to 15-year age bracket.
Svein Moxnes Harfjeld: I think because if you look at the types of ships that are being acquired, they're predominantly in the 10 to 15-year age bracket. And most of those ships that are being sold have been owned by, you know, owners with maybe 2, 3, 4, 5 ships. And you know, they have occasionally a little bit different behavior in the spot market. If these aggregators are sort of getting all those ships under some sort of commercial umbrella, you will have, I think, a different pricing behavior and a different flow of information, importantly, to the people around, right?
Speaker #4: And most of those ships that are being sold have been owned by owners with maybe two, three, four, five ships. And they have occasionally a little bit different behavior in the spot market.
Speaker #4: So if they are if this aggregator starts sort of getting all those ships under some sort of commercial umbrella, you will have, I think, a different pricing behavior and a different flow of information importantly to the people around, right?
Svein Moxnes Harfjeld: So if you are a big operator then like, you know, DSG and some of our peers, you basically have ships in the market all the time, and you have very good information flow, and you get access to pretty much all the business. But if you own two, three ships, you know, there's to be quite meaningful time between every time you fix. So you might not always, you know, have the full flow of information, although I don't mean to be disrespectful of these owners, but to be in the market all the time has a benefit, right? So I think the dynamic is certainly going to change because of this.
Svein Moxnes Harfjeld: So if you are a big operator then like, you know, DSG and some of our peers, you basically have ships in the market all the time, and you have very good information flow, and you get access to pretty much all the business. But if you own two, three ships, you know, there's to be quite meaningful time between every time you fix. So you might not always, you know, have the full flow of information, although I don't mean to be disrespectful of these owners, but to be in the market all the time has a benefit, right? So I think the dynamic is certainly going to change because of this.
Speaker #4: So if you are a big operator like DHT and some of our peers, you basically have ships in the market all the time. And you have very good information flow.
Speaker #4: And you get access to pretty much all the business. But if you own two, three ships, there could be quite meaningful time not always have the full between every time you fix.
Speaker #4: Flow of information, although I don't mean to be—so you might—disrespectful of these owners, but to be in the market all the time has a benefit, right?
Speaker #4: So I think the dynamic is certainly going to change because of
Speaker #4: this. That's very
Frode Mørkedal: That's very interesting. Last question I had is basically on the same topic, like, because this company we're discussing has clearly been a willing buyer, right? And many owners, ship owners, have been willing sellers, and ship values have moved higher. I guess you basically said that they will probably buy more ships, right? But one of the questions I often get from investors is that, you know, are there further willing buyers at the current levels, right? And how do you see vessel values being maintained by these, at these last levels, to be honest?
Frode Mørkedal: That's very interesting. Last question I had is basically on the same topic, like, because this company we're discussing has clearly been a willing buyer, right? And many owners, ship owners, have been willing sellers, and ship values have moved higher. I guess you basically said that they will probably buy more ships, right? But one of the questions I often get from investors is that, you know, are there further willing buyers at the current levels, right? And how do you see vessel values being maintained by these, at these last levels, to be honest?
Speaker #5: interesting. Last question I had. Basically on the same topic, but because this company we're discussing has clearly been a many owners, ship owners have been willing willing buyer, right?
Speaker #5: sellers. And ship values are more higher. I guess you basically said that they will probably buy more And ships, right? But one of the questions I often get from investors is that are they further willing buyers at the current levels, right?
Speaker #5: And how do you see investment values being maintained at these lofty levels to be
Speaker #5: honest? They're not only
Svein Moxnes Harfjeld: They're not the only buyer. So there are other buyers for ships in the sort of, you know, the older spectrum, I would say. Ships predominantly built before 2010, 2011. So there are still buyers there, at the levels we just have sold our older ships at. There's also been, you know, I would say more than a handful of transactions on modern second-hand, plus, minus 5 years of age, and all of those transactions were bid up on price, and there were competition, right? So there's very few modern ships to buy, and, you know, some buyers have been willing to set the new market to get those ships. And these are credible buyers, right? And I don't think they are the only buyer in the market.
Svein Moxnes Harfjeld: They're not the only buyer. So there are other buyers for ships in the sort of, you know, the older spectrum, I would say. Ships predominantly built before 2010, 2011. So there are still buyers there, at the levels we just have sold our older ships at. There's also been, you know, I would say more than a handful of transactions on modern second-hand, plus, minus 5 years of age, and all of those transactions were bid up on price, and there were competition, right? So there's very few modern ships to buy, and, you know, some buyers have been willing to set the new market to get those ships. And these are credible buyers, right? And I don't think they are the only buyer in the market.
Speaker #4: So there are other buyers for the older spectrum, I would say. Ships predominantly built before 2010 or 2011. So, there are still buyers there.
Speaker #4: At sort of levels we just have sold our older ships at. There's also been I would say more than a handful of transactions on modern secondhand plus minus five years of age.
Speaker #4: And all of those transactions were bid up on price. And they were competition, right? So there's very few modern ships to buy. And some buyers have been willing to set the new market to get those ships.
Speaker #4: those and these are credible buyers, And right? And I don't think they are the only buyer in the market. So in general, people are very bullish.
Svein Moxnes Harfjeld: So in general, people are, you know, very bullish, and I understand why. So, I wouldn't say it's sort of the end of the buying spree just yet, so.
Svein Moxnes Harfjeld: So in general, people are, you know, very bullish, and I understand why. So, I wouldn't say it's sort of the end of the buying spree just yet, so.
Speaker #4: And I understand why. So I wouldn't say it's sort of the end of the buying spread just yet.
Frode Mørkedal: Oh, that's good, good to hear. And I guess current time charter rates basically justify those ship values, right? So that's good.
Frode Mørkedal: Oh, that's good, good to hear. And I guess current time charter rates basically justify those ship values, right? So that's good.
Speaker #5: I guess current time charter rates basically justify those ship values, right? So—
Speaker #5: That's good. There you go. Oh, that's good to hear.
Svein Moxnes Harfjeld: Great. There you go.
Svein Moxnes Harfjeld: Great. There you go.
Frode Mørkedal: Thank you so much.
Frode Mørkedal: Thank you so much.
Speaker #5: Thank you so much.
Svein Moxnes Harfjeld: There you go. Welcome.
Svein Moxnes Harfjeld: There you go. Welcome.
Speaker #4: There you go.
Speaker #5: I'll turn it over. Welcome. Thank you.
Frode Mørkedal: I'll turn it over. Thank you.
Frode Mørkedal: I'll turn it over. Thank you.
Svein Moxnes Harfjeld: Thank you.
Svein Moxnes Harfjeld: Thank you.
Speaker #1: Thank Thank
Operator: Thank you. And the next question today comes from the line of Greg Lewis, BTIG. Please go ahead.
Operator: Thank you. And the next question today comes from the line of Greg Lewis, BTIG. Please go ahead.
Speaker #1: you. And the next question today. Comes
Speaker #1: from the line of Greg Lewis, you.
Speaker #1: BTIG. Please go ahead. Hey,
Greg Lewis: ... Hey, thank you and good afternoon, and thanks for taking my questions. I did want to talk a little bit more about the consolidator, and kind of tied in into your fleet. You know, well, at least what we've seen, and correct me if I'm wrong, it seems like their focus has been on, you know, some more of the older age vessels in the fleet, you know, the 15, you know, definitely the 10 plus, but even in some cases, 15 plus year old vessels. You know, I guess what I'm curious, have they been looking to- have they been looking at any more modern or younger tonnage that maybe we just haven't seen?
Greg Lewis: ... Hey, thank you and good afternoon, and thanks for taking my questions. I did want to talk a little bit more about the consolidator, and kind of tied in into your fleet. You know, well, at least what we've seen, and correct me if I'm wrong, it seems like their focus has been on, you know, some more of the older age vessels in the fleet, you know, the 15, you know, definitely the 10 plus, but even in some cases, 15 plus year old vessels. You know, I guess what I'm curious, have they been looking to- have they been looking at any more modern or younger tonnage that maybe we just haven't seen?
Speaker #6: Thank you, and good afternoon. And thanks for taking my questions. I did want to talk a little bit more about the consolidator, and kind of tie that into your fleet.
Speaker #6: At least what we've seen and correct me if I'm you. wrong, it seems like their focus has been on some more of the older age vessels in the fleet, the definitely the 10 plus, but even in some cases 15 plus year old vessels.
Speaker #6: I guess what I guess I'm curious, have they been looking to have they been looking at any maybe we just haven't seen? And then tying it into your fleet, yeah, obviously you announced that we got rid of that last 2007 vessel.
Greg Lewis: Then tying it into your fleet, yeah, you know, obviously, you announced that we got rid of that last 2007 vessel, but at this point, we already had... I mean, time flies when you're having fun, and, you know, I guess at this point, we, we are starting to have 15, some more 15-year-old vessels, just because time goes by in the fleet, and just kind of curious how you're thinking about, you know, some, some of those vessels that, you know, are, are just, you know, in that 15 plus year range now in your fleet.
Greg Lewis: Then tying it into your fleet, yeah, you know, obviously, you announced that we got rid of that last 2007 vessel, but at this point, we already had... I mean, time flies when you're having fun, and, you know, I guess at this point, we, we are starting to have 15, some more 15-year-old vessels, just because time goes by in the fleet, and just kind of curious how you're thinking about, you know, some, some of those vessels that, you know, are, are just, you know, in that 15 plus year range now in your fleet.
Speaker #6: But at this point, we already had—I mean, time flies when you're having fun. And I guess at this point, we are starting to have some more 15-year-old vessels, just because time goes by.
Speaker #6: In the fleet, and just kind of about some of those vessels that are just in that 15-plus-year range now,
Speaker #6: in your fleet. Yeah.
Svein Moxnes Harfjeld: Yeah. So we are done selling, for now. So, these, we have five ships that are built in 2011, 2012. They're fantastic ships, large deadweights, you know, excellent fuel economics, you know, very, very good condition, and they service, both us and our customers very well. And, they are earning top dollars in the market, so they're not going, going anywhere, but staying in the DHT fleet.
Svein Moxnes Harfjeld: Yeah. So we are done selling, for now. So, these, we have five ships that are built in 2011, 2012. They're fantastic ships, large deadweights, you know, excellent fuel economics, you know, very, very good condition, and they service, both us and our customers very well. And, they are earning top dollars in the market, so they're not going, going anywhere, but staying in the DHT fleet.
Speaker #4: So we are done selling. For now. So we have five ships that are built in 2011,
Speaker #4: Economics—very, very good condition. And they service both us and our customers, 2012, very well. And they are—they're fantastic ships, large, earning top dollars in the market.
Speaker #4: So they're not going anywhere but staying in the DHT fleet.
Speaker #6: Okay. And then has the consolidator been looking at more modern tonnage, i.e., because I guess what I'm curious how you're thinking trying to figure out is vessel, not too long you bought the 2018 ago.
Greg Lewis: Okay. And then has the consolidator been looking at more modern tonnage, i.e., 'cause I guess what I'm trying to figure out is, you know, you bought the 2018 vessel not too long ago. Like how much comp- like, is this new consolidator, you know, I mean, I guess we don't want to talk about their name, but have they been... are they looking, are we seeing them bid into that more modern 7 and younger fleet?
Greg Lewis: Okay. And then has the consolidator been looking at more modern tonnage, i.e., 'cause I guess what I'm trying to figure out is, you know, you bought the 2018 vessel not too long ago. Like how much comp- like, is this new consolidator, you know, I mean, I guess we don't want to talk about their name, but have they been... are they looking, are we seeing them bid into that more modern 7 and younger fleet?
Speaker #6: How much is this new consolidator? I mean, I guess we don't want to talk about their name, but have they been are they looking are we seeing them bid into that more modern 7 and younger
Speaker #6: fleet? Yeah.
Svein Moxnes Harfjeld: Yeah, I think so. Although I don't know for a fact, but I think so. So, but for me, it's also been a quite rational the way they've approached sort of the age bracket, call it 10 to 15. I'm not assuming they're religious about it, but so, you know, the cash return on those investments, if you can do what it seems that they are setting out to do, will be significant, right? So, it's a good start in their play and their strategy. I would think, sitting from on the sideline.
Svein Moxnes Harfjeld: Yeah, I think so. Although I don't know for a fact, but I think so. So, but for me, it's also been a quite rational the way they've approached sort of the age bracket, call it 10 to 15. I'm not assuming they're religious about it, but so, you know, the cash return on those investments, if you can do what it seems that they are setting out to do, will be significant, right? So, it's a good start in their play and their strategy. I would think, sitting from on the sideline.
Speaker #4: I think so. Although I don't know for a fact that I think so. But for me, it's also been quite rational the way they've approached the sort of age bracket—call it 10 to 15.
Speaker #4: I'm not assuming they're religious about it. so the cash return on But those investments if you can do what it seems that they are setting out to do, well, these are significant, right?
Speaker #4: So it's a sort of good start in their play and their strategy. I would think sitting on the sideline. We have a different approach because we servicing some quite demanding customers.
Svein Moxnes Harfjeld: You know, we have a different approach because, you know, we are truly in the long term, you know, servicing some quite demanding customers, and you know, we need to also renew some of our equipment and do that timely and stuff like that. So, for me, it's sort of logical what they are doing.
Svein Moxnes Harfjeld: You know, we have a different approach because, you know, we are truly in the long term, you know, servicing some quite demanding customers, and you know, we need to also renew some of our equipment and do that timely and stuff like that. So, for me, it's sort of logical what they are doing.
Speaker #4: And we are truly in the long-term need to also renew some of our equipment and do that timely. And stuff like that. So for me, it's sort of logical what they are
Speaker #4: doing.
Speaker #6: Okay. Yeah. Just maybe just
Greg Lewis: Okay. Yeah, just maybe just 'cause it's a private company, they're able to do things differently. And I did have a question about the broader market and realizing it's kind of only been a couple weeks, and it's a work in progress, but just then what's happened in Venezuela earlier this year, have we started to see signs of that impacting, i.e., crude flow replacements that were previously from Venezuela coming elsewhere? And kind of curious how you see that playing out. You know, just assuming that all that Venezuelan crude that had been heading, you know, I guess primarily to Asia, if that kind of has to deviate maybe to the more to the US.
Greg Lewis: Okay. Yeah, just maybe just 'cause it's a private company, they're able to do things differently. And I did have a question about the broader market and realizing it's kind of only been a couple weeks, and it's a work in progress, but just then what's happened in Venezuela earlier this year, have we started to see signs of that impacting, i.e., crude flow replacements that were previously from Venezuela coming elsewhere? And kind of curious how you see that playing out. You know, just assuming that all that Venezuelan crude that had been heading, you know, I guess primarily to Asia, if that kind of has to deviate maybe to the more to the US.
Speaker #6: because it's a private company and they're able to do things differently. And I did have a question about the broader market and realizing it's kind of only been a couple of weeks and it's a work in progress.
Speaker #6: But just given what's happened in Venezuela earlier this year, have we started to see signs of that impacting, i.e., crude flow replacements that were previously from Venezuela coming elsewhere and kind of curious how you see that playing out?
Speaker #6: Just assuming that all that Venezuelan crude that had been heading I guess primarily to Asia, if that kind of has to deviate maybe to more to the
Speaker #6: Just assuming that all that Venezuelan crude that had been heading I guess primarily to Asia, if that kind of has to deviate maybe to more to the US.
Speaker #4: Yeah. So it's early days, right? But I think that the barrels that are going to move now initially will, from what I read, will predominantly go to the US.
Svein Moxnes Harfjeld: Yeah. So it's early days, right? But I think that, you know, the barrels that are going to move now initially will, from what I read, will predominantly go to the US.
Svein Moxnes Harfjeld: Yeah. So it's early days, right? But I think that, you know, the barrels that are going to move now initially will, from what I read, will predominantly go to the US.
Greg Lewis: Mm-hmm.
Greg Lewis: Mm-hmm.
Svein Moxnes Harfjeld: But there are some dynamics. You know, one of the biggest creditors in Venezuela is China, and that sort of financing that they have provided in the past is supposed to be repaid in oil. So if they're gonna sort of settle the debt, so to speak, and with bonds and all these things and get that sorted, I would guess, you know, China would want their hands on some of that oil. And we have seen now or read that Trafigura and Vitol are, you know, being engaged as traders or marketeers of this oil, and I think we should expect that some of this will be placed in Asia. The key now, of course, is how quickly can they ramp up the production?
Svein Moxnes Harfjeld: But there are some dynamics. You know, one of the biggest creditors in Venezuela is China, and that sort of financing that they have provided in the past is supposed to be repaid in oil. So if they're gonna sort of settle the debt, so to speak, and with bonds and all these things and get that sorted, I would guess, you know, China would want their hands on some of that oil. And we have seen now or read that Trafigura and Vitol are, you know, being engaged as traders or marketeers of this oil, and I think we should expect that some of this will be placed in Asia. The key now, of course, is how quickly can they ramp up the production?
Speaker #4: But there is some dynamics there. One of the biggest creditors in Venezuela is China. And that sort of financing that they provided in the past is supposed to be repaid in oil.
Speaker #4: So if they're going to sort of settle the debts, so to speak, and with bonds and all these things and get that sorted, I would guess China would want their hands on some of that oil.
Speaker #4: And we have seen now already that traffic EUR and ETOL are being engaged as traders or marketeers of this oil. And I think we should expect that some of this will be placed in Asia.
Speaker #4: The key now, of course, is that how quickly can they ramp up their production? I think the sort of lighter products that they have, which are offshore, is probably easier to get going Orinoco, Delta, and Vitoman, than some of the heavier stuff in the and or emulsion and stuff like that.
Svein Moxnes Harfjeld: I think the sort of lighter products that they have, which are offshore, is probably easier to get going than some of the heavier stuff in the Orinoco Delta and bitumen and Orimulsion and stuff like that, and whether they're gonna be able to blend into the sort of, I think it's called the Merey grade. So, you know, this will probably take a bit longer time, but of course, they have vast resources, right? And, it will be great for the country if they can get this or get traction on this, capital investment and get the production up. So I just think this is gonna be good for the markets, absolutely, so.
Svein Moxnes Harfjeld: I think the sort of lighter products that they have, which are offshore, is probably easier to get going than some of the heavier stuff in the Orinoco Delta and bitumen and Orimulsion and stuff like that, and whether they're gonna be able to blend into the sort of, I think it's called the Merey grade. So, you know, this will probably take a bit longer time, but of course, they have vast resources, right? And, it will be great for the country if they can get this or get traction on this, capital investment and get the production up. So I just think this is gonna be good for the markets, absolutely, so.
Speaker #4: And whether they're going to be able to blend into the sort of, I think it's called the mayor grade. So this will probably take a bit longer time.
Speaker #4: But of course, they have a vast resources, right? country if they can get this sort And it will be great for the of or get traction on this sort of capital invested and get the production up.
Speaker #4: So I just think this is going to be good for the markets. Absolutely. So just to that point, right, you mentioned traffic and I believe ETOL stepping in to kind of move some of that oil out of Venezuela.
Greg Lewis: And just to that point, right, you mentioned, you know, Trafigura, and I believe Vitol stepping in to kind of move some of that oil, you know, out of Venezuela. You know, I guess not historically, but you know, at least the last couple years, it's been moved on shadow fleet. Is there a process to those entities, you know, bringing online companies like DHT, hey, DHT, you know, realizing that Venezuela's not been a place you've been going to before? Is there, like, a process in getting companies like you on board so that, you know, we're able to move this oil on a, on, you know, on, I guess, the mainstream fleet?
Greg Lewis: And just to that point, right, you mentioned, you know, Trafigura, and I believe Vitol stepping in to kind of move some of that oil, you know, out of Venezuela. You know, I guess not historically, but you know, at least the last couple years, it's been moved on shadow fleet. Is there a process to those entities, you know, bringing online companies like DHT, hey, DHT, you know, realizing that Venezuela's not been a place you've been going to before? Is there, like, a process in getting companies like you on board so that, you know, we're able to move this oil on a, on, you know, on, I guess, the mainstream fleet?
Speaker #4: I guess not historically, but at least the last couple of years, it's been moved on shadow fleet. Is there a process to those entities bringing online companies like DHT, "Hey, a place you've been going to before." Is there a process in getting companies like you on board so that we're able to move this oil on a, I guess, the mainstream fleet?
Svein Moxnes Harfjeld: ... It has to be, but I think it's fair to assume here that, you know, say it's Trafigura and Vitol that will sell this oil, they will hold the title of that oil, right? So they, they will be our customer. And of course, you know, it has to be clear that there's no OFAC risk for a company like DHT in moving that oil. So, we haven't seen any of this yet, but I think everybody sort of expect and understand that that has to be resolved in a proper fashion.
Svein Moxnes Harfjeld: ... It has to be, but I think it's fair to assume here that, you know, say it's Trafigura and Vitol that will sell this oil, they will hold the title of that oil, right? So they, they will be our customer. And of course, you know, it has to be clear that there's no OFAC risk for a company like DHT in moving that oil. So, we haven't seen any of this yet, but I think everybody sort of expect and understand that that has to be resolved in a proper fashion.
Speaker #4: It has to be. But I think it's fair to assume here that, say, it's Trafigura and ETOL that will sell this oil. They will hold the title of that oil, right?
Speaker #4: So they will be our customer. And of course, it has to be clear that there's no OFAC risk for a company like DHT in moving that oil.
Speaker #4: So, we haven't—everybody is sort of expecting and understanding that that has fashion.
Speaker #4: to be resolved in a proper Okay.
Speaker #4: to be resolved in a proper Okay. Thank Super helpful.
Frode Mørkedal: Okay. Super helpful. Thank you very much.
Greg Lewis: Okay. Super helpful. Thank you very much.
Speaker #6: Thank you very much.
Svein Moxnes Harfjeld: Thank you, Greg.
Svein Moxnes Harfjeld: Thank you, Greg.
Speaker #4: you,
Speaker #4: Craig. Thank
Operator: Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone and wait for your name to be announced. We will now take our next question. This is from Eirik Haavaldsen from Pareto. Please go ahead.
Operator: Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone and wait for your name to be announced. We will now take our next question. This is from Eirik Haavaldsen from Pareto. Please go ahead.
Speaker #1: As a reminder, if you would like to ask a question, please press star one and one on your telephone and wait for your name to be announced.
Speaker #1: question. And this is We will now take our next from Eric Havaldsen from Pareto. Please go ahead.
Eirik Haavaldsen: Yeah. Hi, Svein. I just wanted to ask you on your balance sheet, because, of course, with the cash flows you're now generating and with the vessel sales you've announced, you're quickly getting back to, even after all these investments or the investments you made now in newbuilds and, and, Nokota, I mean, you're getting down to a level, below scrap very quickly. So, what's the thinking there? What's the ideal level of debt? Because on an LTV basis, I think you're, you're down to levels you haven't really been at before.
Eirik Haavaldsen: Yeah. Hi, Svein. I just wanted to ask you on your balance sheet, because, of course, with the cash flows you're now generating and with the vessel sales you've announced, you're quickly getting back to, even after all these investments or the investments you made now in newbuilds and, and, Nokota, I mean, you're getting down to a level, below scrap very quickly. So, what's the thinking there? What's the ideal level of debt? Because on an LTV basis, I think you're, you're down to levels you haven't really been at before.
Speaker #7: Yeah. So I just wanted to ask you on your balance sheet because, of course, with the cash flows you now generating and with the vessel sales, you've announced you're quickly getting back to a even after all these investments or the investments you've made now in new boats and no quota.
Speaker #7: I mean, you're getting down to a level of below scrap very quickly. So what's the thinking there? What's the ideal level of debt? Because on an LTV basis, at least, you're down to levels you haven't really been at
Speaker #7: before.
Svein Moxnes Harfjeld: I think it's important here to make a distinction between book, you know, debt to book and debt to market value. So market values now, of course, have been going up. So then that leverage is sort of in the teens, as Laila spoke about earlier. To book, it's about 26.5%, so thereabout. I think over time, you know, ideally, you know, we want to continue to, you know, invest and grow the business. Right now, it's a bit hard to find meaningful investments, but to have that capacity in the balance sheet and do this organically and not being so reliant on printing new shares has, you know, been important target for us.
Svein Moxnes Harfjeld: I think it's important here to make a distinction between book, you know, debt to book and debt to market value. So market values now, of course, have been going up. So then that leverage is sort of in the teens, as Laila spoke about earlier. To book, it's about 26.5%, so thereabout. I think over time, you know, ideally, you know, we want to continue to, you know, invest and grow the business. Right now, it's a bit hard to find meaningful investments, but to have that capacity in the balance sheet and do this organically and not being so reliant on printing new shares has, you know, been important target for us.
Speaker #4: I think it's important here to make a
Speaker #4: distinction between book debt to book and debt to market value. So market values now, of course, have been going up. So then that Laila spoke about leverage is sort of in the teens as earlier.
Speaker #4: and a half percent or To book, it's about 26 thereabout. I think over time, ideally, we want to continue to invest and grow the business.
Speaker #4: Right now, it's a bit hard to find meaningful investments. But to have that capacity in a balance sheet, and do this organically and not be so reliant on printing new shares, has been important targets for us.
Svein Moxnes Harfjeld: I think, secondly, our dividend policy, you know, also, an important pillar in structuring that, is that there is a meaningful delta between P&L and cash break-even, because you always need some cash being retained in the company for other purposes than paying out dividends. And if you start to lever up, you know, too much, for the lack of a better word, then you close that delta, which means you will have basically no cash flow left in the company, so or little, very little. So that's not an ideal scenario. So it's not, I cannot sort of give you or guide you on a, specific percentage or, you know, magic number, but these are sort of general things that we think about, when we do this.
Speaker #4: I think secondly, our dividend policy also an important pillar in structuring that is that there is a meaningful delta between P&L and cash breakeven.
Svein Moxnes Harfjeld: I think, secondly, our dividend policy, you know, also, an important pillar in structuring that, is that there is a meaningful delta between P&L and cash break-even, because you always need some cash being retained in the company for other purposes than paying out dividends. And if you start to lever up, you know, too much, for the lack of a better word, then you close that delta, which means you will have basically no cash flow left in the company, so or little, very little. So that's not an ideal scenario. So it's not, I cannot sort of give you or guide you on a, specific percentage or, you know, magic number, but these are sort of general things that we think about, when we do this.
Speaker #4: Because you always need some cash being retained in the company for other purposes than paying out dividends. And if you start to lever up too much, with the lack of a better word, then you close that delta, which means you will have basically no cash flow left in the company.
Speaker #4: So or very little. So that's not an ideal scenario. So it's not I cannot sort of give you or guide you on a specific percentage or a magic number.
Speaker #4: But these are sort of general things that we think about when we do this. We looked at some secondhand opportunities sort of end of last year.
Svein Moxnes Harfjeld: We looked at some second opportunities sort of end of last year. But you know, prices run away from us, so we didn't do anything, obviously. But that stuff we have capacity to do, to pick up you know, a couple of modern ships without you know, any new capital. So we want to have that that capacity so.
Svein Moxnes Harfjeld: We looked at some second opportunities sort of end of last year. But you know, prices run away from us, so we didn't do anything, obviously. But that stuff we have capacity to do, to pick up you know, a couple of modern ships without you know, any new capital. So we want to have that that capacity so.
Speaker #4: But prices run away from us. So we didn't do anything, obviously. But that stuff we had capacity to do, to pick up a couple of modern ships without any new capital.
Speaker #4: So we want to have that capacity. So, I mean, there's been a lot of talk, obviously on this call as well, about this consolidator pushing values higher.
Eirik Haavaldsen: I mean, there's been a lot of talk, obviously, on this call as well, about this consolidated, pushing values high. But I guess another thing is also shipyards and newbuild prices and weaker dollar and backlogs that are increasing and so on. So where do you see newbuild prices headed over the next year? And, and I guess also, with regards to your fleet, because you've cleared out now all the Chinese-built vessels, are Chinese vessels, or I guess, vessels under construction in China of interest to you? Or will you now, you know, have a sole Korea focus, which I guess can be valuable, over time.
Eirik Haavaldsen: I mean, there's been a lot of talk, obviously, on this call as well, about this consolidated, pushing values high. But I guess another thing is also shipyards and newbuild prices and weaker dollar and backlogs that are increasing and so on. So where do you see newbuild prices headed over the next year? And, and I guess also, with regards to your fleet, because you've cleared out now all the Chinese-built vessels, are Chinese vessels, or I guess, vessels under construction in China of interest to you? Or will you now, you know, have a sole Korea focus, which I guess can be valuable, over time.
Speaker #4: But I guess another thing is also shipyards and newborn orn prices and weaker dollar and backlogs that are increasing and so on. So where do you see newborn prices headed over the next year?
Speaker #4: And I guess also with regards to your fleet because you've cleared out now all the Chinese boat vessels. Are Chinese vessels or, I guess, vessels and the construction in China of interest to you?
Speaker #4: Or will you now have a sole Korea focus, which I guess can be valuable over time? We have nothing in principle against ships built by Chinese shipyards.
Svein Moxnes Harfjeld: We have nothing in principle against, you know, ships built at Chinese shipyard. We have potentially, you know, maybe, a couple of yards that we prefer or rate or rank, you know, above maybe some others that have less experience in building ships. I think importantly now, this USTR issue between the US and China got postponed until November. So we'd like to see some clarity on that before we make sort of final decisions on this. But, you know, a significant portion, probably 70% now of the order book, you know, for these are in China, and I think it's gonna be hard to just disregard this. So it's just a question of how we can potentially approach that going forward. But I think nothing is gonna happen our side just now.
Svein Moxnes Harfjeld: We have nothing in principle against, you know, ships built at Chinese shipyard. We have potentially, you know, maybe, a couple of yards that we prefer or rate or rank, you know, above maybe some others that have less experience in building ships. I think importantly now, this USTR issue between the US and China got postponed until November. So we'd like to see some clarity on that before we make sort of final decisions on this. But, you know, a significant portion, probably 70% now of the order book, you know, for these are in China, and I think it's gonna be hard to just disregard this. So it's just a question of how we can potentially approach that going forward. But I think nothing is gonna happen our side just now.
Speaker #4: We have potentially maybe a couple of yards that we've preferred or rate or rank above maybe some others that have less experience in building ships.
Speaker #4: think importantly now, this USDR issue between the US and I China got postponed until November. So we would like to see some clarity on that before we make sort of final decisions on this.
Speaker #4: But a significant portion probably 70% now of the order book for these are in China. And I think it's going to be hard to just disregard this.
Speaker #4: So it's just a question of how we can potentially approach that going forward. But I think nothing is going to happen our side just now.
Speaker #4: We have to wait a little bit.
Svein Moxnes Harfjeld: We have to wait a little bit.
Svein Moxnes Harfjeld: We have to wait a little bit.
Eirik Haavaldsen: But, but the Hanwha and Hyundai vessels are now delivering, I guess, first half 2029. What would the price be?
Eirik Haavaldsen: But, but the Hanwha and Hyundai vessels are now delivering, I guess, first half 2029. What would the price be?
Speaker #7: But the handler of inlay vessel now delivering, I guess, first half 2029—what would the price be?
Svein Moxnes Harfjeld: I think ±130. One yard is just below, one yard is just above. So, and it's far out, right? So I think to sort of deploy capital now that will not work is the challenge, right? So of course, we have some RCF capacity we can repay and save some interest expense, things like that. So it's just a question of, you know, making all this sort of work, you know, sufficiently, but at the same time, also sensibly for the company. So maybe there will be some reset opportunities at a, you know, attractive price at some point. Right now, I would think chances are low, but that can change, right? So.
Svein Moxnes Harfjeld: I think ±130. One yard is just below, one yard is just above. So, and it's far out, right? So I think to sort of deploy capital now that will not work is the challenge, right? So of course, we have some RCF capacity we can repay and save some interest expense, things like that. So it's just a question of, you know, making all this sort of work, you know, sufficiently, but at the same time, also sensibly for the company. So maybe there will be some reset opportunities at a, you know, attractive price at some point. Right now, I would think chances are low, but that can change, right? So.
Speaker #4: I think plus minus 130 one yard is just below one yard is just above. So and it's far out, right? So I think to sort of deploy capital now that will not work is the challenge, right?
Speaker #4: So of course, we have some RCF capacity we like that. So it's just a question can repay and save some interest expense, things work sufficiently.
Speaker #4: But at the same time, also sensibly for the company. So maybe there will be some reset opportunities at attractive price at some point. Right now, I would think chances are no.
Speaker #4: But that can change, right? So are these some learnings too high? I guess it's a good problem to have. Thank you. Yes. Yeah. Of course.
Eirik Haavaldsen: At least the earnings are too high. I guess it's a good problem to have. Thank you, Svein.
Eirik Haavaldsen: At least the earnings are too high. I guess it's a good problem to have. Thank you, Svein.
Svein Moxnes Harfjeld: Yes. Yeah, of course. Thank you.
Svein Moxnes Harfjeld: Yes. Yeah, of course. Thank you.
Speaker #4: Thank you.
Operator: Thank you. As a reminder, if there are any further questions, please press star one and one on your telephone and wait for your name to be announced. Thank you. We will now take our next question. This is from Geoffrey Scott from Scott Asset Management. Please go ahead.
Operator: Thank you. As a reminder, if there are any further questions, please press star one and one on your telephone and wait for your name to be announced. Thank you. We will now take our next question. This is from Geoffrey Scott from Scott Asset Management. Please go ahead.
Speaker #1: reminder, if there are any further questions, please Thank you. As a press star one and one on your telephone and wait for your name to be announced.
Speaker #1: Thank you. We will now take our next question. This is from Jeffrey Scott from Scott Asset Management. Please go ahead.
Geoffrey Scott: Good morning. Has there been any resolution of protocols for demolition of the non-compliant fleet? Thanks.
Speaker #8: Good morning. Resolution of protocols—has there been any for demolition of the non-compliance fleet?
Geoffrey Scott: Good morning. Has there been any resolution of protocols for demolition of the non-compliant fleet? Thanks.
Speaker #8: Thanks.
Svein Moxnes Harfjeld: That's a good question. So, we understand now that one of the two largest sort of cash buyers in the demolition market is now seeking to get approvals, especially now from the US and OFAC, to transact then with counterparties that have been sanctioned in order to acquire these ships and get them demolished. So, I don't really have an update as of today, you know, what the status is, but I think it makes a lot of sense for everyone to get that resolved and get that activity going.
Svein Moxnes Harfjeld: That's a good question. So, we understand now that one of the two largest sort of cash buyers in the demolition market is now seeking to get approvals, especially now from the US and OFAC, to transact then with counterparties that have been sanctioned in order to acquire these ships and get them demolished. So, I don't really have an update as of today, you know, what the status is, but I think it makes a lot of sense for everyone to get that resolved and get that activity going.
Speaker #4: That's a good question. So
Speaker #4: two largest sort of cash buyers in the demolition market is now seeking to get approvals, especially now from the US and OFAC. To transact then we understand now that one of the with counterparties that have been sanctioned in order to acquire these ships and get them demolished.
Speaker #4: So I don't really have an update as of today what the status is. But I think it makes a lot of sense for everyone to get that resolved and get that activity going.
Speaker #4: Because we have some of
Svein Moxnes Harfjeld: Because we have some of these ships now that are very old and in the shadow fleet that are, you know, losing out on work because, you know, conditions or maybe some crew don't wanna work on them and things like that. And, so they, they will have to go, and I think this will happen. And I think it's good news that at least one of those cash buyers are pursuing this. I would suspect that maybe the other big one is doing maybe something similar, although I haven't heard the name specifically. But I would guess that they, they will be looking into the same, so we can get that activity going.
Svein Moxnes Harfjeld: Because we have some of these ships now that are very old and in the shadow fleet that are, you know, losing out on work because, you know, conditions or maybe some crew don't wanna work on them and things like that. And, so they, they will have to go, and I think this will happen. And I think it's good news that at least one of those cash buyers are pursuing this. I would suspect that maybe the other big one is doing maybe something similar, although I haven't heard the name specifically. But I would guess that they, they will be looking into the same, so we can get that activity going.
Speaker #1: These ships . that are very old and in the Shadow that are , Fleet , you know , losing out on work because , you know , conditions are maybe some crew don't want to work on them .
Geoffrey Scott: Do you think this will get resolved sooner rather than later? How helpful are you?
Geoffrey Scott: Do you think this will get resolved sooner rather than later? How helpful are you?
Svein Moxnes Harfjeld: Yeah, I wish I could be more specific. I don't know, and I don't know the process with the, I guess, OFAC here and how it will work and what sort of political support you need or whether it's a technocratic decision. I don't know the process, so I, sorry, I can't kinda give you a better guidance. But I think we take some encouragement that there is a process that has started.
Svein Moxnes Harfjeld: Yeah, I wish I could be more specific. I don't know, and I don't know the process with the, I guess, OFAC here and how it will work and what sort of political support you need or whether it's a technocratic decision. I don't know the process, so I, sorry, I can't kinda give you a better guidance. But I think we take some encouragement that there is a process that has started.
Geoffrey Scott: Okay. Thank you very much.
Geoffrey Scott: Okay. Thank you very much.
Svein Moxnes Harfjeld: Thank you.
Svein Moxnes Harfjeld: Thank you.
Operator: Thank you. And if there are any further questions, please press star one and one on your keypad. There are no further questions coming through, sir, so I will now hand back to you for any closing comments. Thank you.
Operator: Thank you. And if there are any further questions, please press star one and one on your keypad. There are no further questions coming through, sir, so I will now hand back to you for any closing comments. Thank you.
Svein Moxnes Harfjeld: Well, thank you to all for listening in on DHT, and we appreciate the interest and support, and wish you all a great day ahead. Thank you.
Svein Moxnes Harfjeld: Well, thank you to all for listening in on DHT, and we appreciate the interest and support, and wish you all a great day ahead. Thank you.
Operator: Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.
Operator: Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.
