DHT Holdings, Inc. Third Quarter 2023 Results
HAMILTON, BERMUDA, November 6, 2023 – DHT Holdings, Inc. (NYSE: DHT) (“DHT” or the “Company”) today announced:
FINANCIAL HIGHLIGHTS:
|
USD mill. (except per share)
|
Q3 2023
|
Q2 2023
|
Q1 2023
|
Q4 2022
|
Q3 2022
|
2022
|
2021
|
|
Shipping revenues
|
130.3
|
152.0
|
131.5
|
166.5
|
108.2
|
450.4
|
295.9
|
|
Adjusted net revenues1
|
89.1
|
112.9
|
93.9
|
116.7
|
55.3
|
264.9
|
203.4
|
|
Adjusted EBITDA2
|
67.4
|
89.8
|
71.9
|
95.4
|
35.6
|
177.9
|
113.7
|
|
Profit/(loss) after tax
|
31.0
|
57.1
|
38.0
|
61.8
|
7.5
|
62.0
|
(11.5)
|
|
EPS – basic
|
0.19
|
0.35
|
0.23
|
0.38
|
0.04
|
0.37
|
(0.07)
|
|
EPS – diluted3
|
0.19
|
0.35
|
0.23
|
0.38
|
0.04
|
0.37
|
(0.07)
|
|
Dividend4
|
0.19
|
0.35
|
0.23
|
0.38
|
0.04
|
0.48
|
0.10
|
|
Interest bearing debt
|
436.6
|
388.3
|
395.7
|
396.7
|
418.9
|
396.7
|
522.3
|
|
Cash and cash equivalents
|
73.9
|
130.6
|
117.5
|
125.9
|
65.7
|
125.9
|
60.7
|
|
Net debt
|
367.7
|
257.6
|
278.2
|
270.7
|
353.2
|
270.7
|
461.6
|
QUARTERLY HIGHLIGHTS:
| • |
In the third quarter of 2023, the Company achieved average combined time charter equivalent earnings of $42,500 per day, comprised of $35,500 per day for the Company’s VLCCs on time-charter and $44,700 per
day for the Company’s VLCCs operating in the spot market. The result for the Company’s VLCCs operating in the spot market, measured on a discharge-to-discharge basis, was $42,300 per day for the third quarter of 2023.
|
| • |
Adjusted EBITDA for the third quarter of 2023 was $67.4 million. Net profit for the quarter was $31.0 million, which equates to $0.19 per basic share.
|
| • |
In the third quarter of 2023, the Company purchased 1,137,583 of its own shares in the open market for an aggregate consideration of $9.9 million, at an average price of $8.72. All shares were retired upon
receipt.
|
| • |
For the third quarter of 2023, the Company declared a cash dividend of $0.19 per share of outstanding common stock, payable on November 28, 2023, to shareholders of record as of November 21, 2023. This marks the 55th consecutive quarterly cash dividend and is in line with the Company’s capital allocation policy to pay out 100% of net income. The shares will trade
ex-dividend from November 20, 2023.
|
| • |
During the quarter, the Company took delivery of DHT Appaloosa, the 2018 VLCC acquired for $94.5 million. The vessel was financed with available liquidity and a $45 million secured credit facility under the incremental facility with
ING as agent. The new facility bears interest at a rate equal to SOFR plus a margin of 1.80% and is payable in quarterly installments of $0.75 million. The facility has a 20-year profile and maturity in line with the ING credit facility.
|
OPERATIONAL HIGHLIGHTS:
| |
Q3 2023
|
Q2 2023
|
Q1 2023
|
Q4 2022
|
Q3 2022
|
2022
|
2021
|
|
Operating days5
|
2,177.7
|
2,093.0
|
2,070.0
|
2,116.0
|
2,184.3
|
8,929.0
|
9,776.5
|
|
Scheduled off hire days
|
79.1
|
60.9
|
111.8
|
63.5
|
-
|
150.3
|
514.7
|
|
Unscheduled off hire6
|
0.1%
|
1.3%*
|
2.2%*
|
0.1%
|
0.0%
|
0.2%
|
0.1%
|
|
Revenue days7
|
2,096.0
|
2,005.6
|
1,912.8
|
2,051.5
|
2,181.5
|
8,721,7
|
9,157.3
|
|
Spot exposure6
|
77.3%
|
70.4%
|
72.9%
|
74.7%
|
74.5%
|
75.4 %
|
54.7 %
|
|
VLCC time charter rate per day
|
$ 35,500
|
$ 36,200
|
$ 35,000
|
$36,100
|
$35,300
|
$34,600
|
$32,600
|
|
VLCC spot rate per day
|
$ 44,700
|
$ 64,800
|
$ 54,600
|
$63,800
|
$22,000
|
$29,000
|
$13,200
|
*In Q2 2023
one vessel underwent an unscheduled repair, accounting for the predominant part of the unscheduled off hire for the quarter. In Q1 2023 one vessel encountered bad weather damage, accounting for the predominant part of the unscheduled off hire
for the quarter.
The freight market commenced the quarter with robust rates, however, with a weakening trend further into the quarter driven
by oil production cuts by OPEC+. As experienced during soft patches earlier in the year, the lows show more robustness when compared to historical seasonality swings with time charter equivalent earnings bottoming out around $30,000 per day
for modern ships, before strengthening again. As stated in our most recent releases, this suggests to us that the underlying freight market is between balanced and tight, with dynamics gradually moving towards tight. This view is supported by
the most recent strengthening in freight rates, reaching time charter equivalent earnings for modern ships fitted with exhaust gas cleaning systems around the $70,000 per day mark.
The key agencies are maintaining their views on the balances in the oil market, with a general tightening trend. The oil supply cuts have pushed oil prices upwards in a market
with low inventories, a backwardated oil price curve and higher interest rates, driving refiners to draw down inventories of crude oil. Our high-level takeaway from following oil market analyses and statements from leading oil producers, as well
as discussing with our customers, is that it is reasonable to expect more oil supply to hit the market during the first quarter of next year. This view is a contributing factor to increased interest from many of our customers in engaging in term
contracts.
Following the few newbuilding orders that have been placed year-to-date, the activity seems to have dissipated with limited interest in ordering new large tankers. We believe
this reflects several key factors impacting investment decisions, or lack of, hereunder high asking prices from ship builders requiring life-time earnings well above historical averages, long lead-time to deliver new ships, increased cost of
capital, and no convincing arguments related to future fuels and technologies. This comes at a time when we think the global fleet is of a sufficient size to profitably service the industry in the foreseeable future.
It is an increasingly complex geopolitical environment with conflicts and risks on many fronts, all that could influence our
business. In balance, this seems to support continued focus on energy security and strong demand for our services. We will retain our discipline with respects to allocation of capital and manage risks within our control, continuing to run our
business as safe, efficiently, and profitably as we can. We like the way we are positioned with our robust financial position, highly competent organization both onboard and ashore, operating a quality fleet serving our strong customer base,
in a market with rewarding prospects. In short, we are convinced of the merits of our strategy and its ability to reward shareholders.
As of September 30, 2023, DHT had a fleet of 24 VLCCs, with a total dwt of 7,479,184. For more details on the fleet, please refer to the web site:
https://www.dhtankers.com/fleetlist/
OUTLOOK:
| |
Estimated
Q4 2023
|
|
Total term time charter days
|
420
|
|
Average term time charter rate ($/day)*
|
|
|
Total spot days for the quarter
|
1,790
|
|
Spot days booked to date
|
|
|
Average spot rate booked to date ($/day)
|
|
|
Spot P&L break-even for the quarter
|
|
* The month of October includes a profit-sharing. The months of November and December assumes only
the base rate.
| • |
Thus far in the fourth quarter of 2023, 71% of the available VLCC spot days have been booked at an average rate of $41,500 per day on a discharge-to-discharge basis. 77% of the available
VLCC days, combined spot and time-charter days, have been booked at an average rate of $40,200 per day.
|
Footnotes:
1Shipping revenues net of voyage expenses.
2 Shipping revenues net of voyage expenses, other revenues, vessel operating
expenses and general and administrative expenses.
3Diluted shares include the dilutive effect of the restricted shares granted
to management and members of the board of directors.
4Per common share.
5Operating days are the aggregate number of calendar days in the period in
which the vessels are owned by the Company or chartered by the Company.
6As % of total operating days in period.
7Revenue days are the aggregate number of calendar days in the period in
which the vessels are owned by the Company or chartered by the Company less days on which a vessel is off hire or repositioning days in connection with sale.
THIRD QUARTER 2023 FINANCIALS
The Company reported shipping revenues for the third quarter of 2023 of $130.3 million compared to shipping revenues of $108.2 million in the third quarter of 2022. The increase from the 2022 period to the 2023 period includes $26.3 million attributable to higher tanker rates, partially offset by $4.2 million attributable to a decrease in revenue days due to drydockings.
Other revenues for the third quarter of 2023 were $1.2 million compared to $1.7 million in the third quarter of 2022 and mainly relate to technical management services provided.
The Company did not record any gain or loss related to sale of vessels in the third quarter of 2023. In the third quarter of 2022, the Company recorded a gain of $6.8 million related to the sale of
DHT Edelweiss.
Voyage expenses for the third quarter of 2023 were $41.2 million, compared to voyage expenses of $52.9 million in the third quarter of 2022. The change was related to a decrease in bunker expenses
of $11.1 million and a decrease in port expenses of $1.9 million, partially offset by an increase in broker commission and other voyage-related costs of $1.4 million.
Vessel operating expenses for the third quarter of 2023 were $18.6 million compared to $17.6 million in the third quarter of 2022. The increase was mainly related to an
increase of $1.0 million in additional up storing of spares and consumables in connection with drydockings.
Depreciation and amortization, including depreciation of capitalized survey expenses, was $28.3 million for the third quarter of 2023, compared to $30.2 million in the third quarter of 2022. The
decrease was due to decreased depreciation of exhaust gas cleaning systems of $2.5 million, partially offset by an increase in depreciation of $0.6 million related to vessels and drydocking.
General and administrative (“G&A”) expense for the third quarter of 2023 was $4.3 million, consisting of $3.5 million cash and $0.8 million non-cash charge, compared to $3.9 million in the
third quarter of 2022, consisting of $3.2 million cash and $0.6 million non-cash charge. Non-cash G&A includes accrual for social security tax.
Net financial expenses for the third quarter of 2023 were $8.0 million compared to $4.5 million in the third quarter of 2022. The increase was mainly
due to a
non-cash gain of $2.8 million related to interest rate derivatives in the third quarter of 2022 and increased interest expense of $1.9 million due to increased interest rates,
partially offset by interest income of $1.2 million in the third quarter of 2023 compared to $0.1 million in the third quarter of 2022.
As a result of the foregoing, the Company had a net profit in the third quarter of 2023 of $31.0 million, or income of $0.19 per basic share and $0.19 per diluted share, compared to a net profit in
the third quarter of 2022 of $7.5 million, or income of $0.04 per basic share and $0.04 per diluted share. The increase from the third quarter of 2022 to the third quarter of 2023 was mainly due to higher tanker rates.
Net cash provided by operating activities for the third quarter of 2023 was $55.7 million compared to $5.5 million for the third quarter of 2022. The increase was due to a profit of $31.0 million in
the third quarter of 2023 compared to a profit of $7.5 million in the third quarter of 2022, a $19.1 million change in operating assets and liabilities and a $7.6 million increase in non-cash items included in net income.
Net cash used in investing activities was $93.0 million in the third quarter of 2023 and was related to investment in vessels. Net cash provided by investing activities was $34.6 million in the
third quarter of 2022 and comprised $37.0 million related to the sale of a vessel, partially offset by $2.3 million related to investment in vessels.
Net cash used in financing activities for the third quarter of 2023 was $19.3 million comprised of $56.7 million related to cash dividend paid, $45.0 million related to
prepayment of long-term debt, $9.9 million related to purchase of treasury shares and $6.9 million related to scheduled repayment of long-term debt, partially offset by $99.5 million related to issuance of long-term debt. Net cash used in
financing activities for the third quarter of 2022 was $79.8 million comprised of $50.0 million related to prepayment of long-term debt, $12.2 million repayment of long-term debt in connection with sale of vessel, $8.8 million related to purchase
of treasury shares, $6.5 million related to cash dividend paid and $1.9 million related to scheduled repayment of long-term debt.
As of September 30, 2023, the cash balance was $73.9 million, compared to $125.9 million as of December 31, 2022. The change is mainly
related to investing activities.
The Company monitors its covenant compliance on an ongoing basis. As of September 30, 2023, the Company was in compliance with its financial covenants.
As of September 30, 2023, the Company had 160,999,542 shares of common stock outstanding compared to 162,653,339 shares as of December 31, 2022.
The Company declared a cash dividend of $0.19 per common share for the third quarter of 2023 payable on November 28, 2023, for shareholders of record
as of November 21, 2023.
NINE MONTHS 2023 FINANCIALS
The Company reported shipping revenues for the first three quarters of 2023 of $413.8 million compared to $283.9 million in the first three quarters of 2022. The increase from the 2022 period to the
2023 period includes $157.8 million attributable to higher tanker rates partially offset by $27.9 million attributable to decreased total revenue days.
Other revenues for the first three quarters of 2023 were $3.4 million compared to $2.4 million in the first three quarters of 2022 and mainly relates to technical management services provided. In
May 2022, the Company acquired an additional 3.2% of Goodwood Ship Management Pte. Ltd. and increased the ownership to 53.2% through a step acquisition. Other revenues for the first three quarters of 2022 applies for the period from May 31 to
September 30, 2022.
The Company did not record any gain or loss related to sale of vessels in the first three quarters of 2023. In the first three quarters of 2022, the Company recorded a gain of $19.5 million related
to the sale of DHT Hawk, DHT Falcon and DHT Edelweiss.
Voyage expenses for the first three quarters of 2023 were $117.9 million compared to voyage expenses of $135.7 million in the first three quarters of 2022. The change was related to a decrease in
bunker expenses of $19.2 million and a decrease in port expenses of $3.0 million, partially offset by an increase in broker commission and other voyage-related costs of $4.4 million.
Vessel operating expenses for the first three quarters of 2023 were $56.7 million compared to $53.9 million in the first three quarters of 2022. The increase was mainly due to $1.1 million related
to the consolidation of Goodwood, an increase of $1.0 million related to insurance and an increase of $0.6 million related to lubes.
Depreciation and amortization, including depreciation of capitalized survey expenses, was $80.4 million for the first three quarters of 2023, compared to $95.6 million in the first three quarters of
2022. The decrease was mainly due to decreased depreciation of exhaust gas cleaning systems of $11.6 million and decreased depreciation of $4.0 million related to vessels and drydocking.
G&A for the first three quarters of 2023 was $13.5 million, consisting of $10.8 million cash and $2.7 million non-cash charge, compared to $14.1 million, consisting of $10.6 million cash and
$3.5 million non-cash charge for the first three quarters of 2022.
Net financial expenses for the first three quarters of 2023 were $22.2 million, compared to $5.8 million in the first three quarters of 2022. The increase was due to a non-cash gain of $15.0 million related to interest rate derivatives in the first three quarters of 2022 compared to a non-cash loss of $0.5 million in the first three quarters of 2023 and increased
interest expense of $4.1 million due to increased interest rates, partially offset by interest income of $3.6 million in the first three quarters of 2023 compared to $0.2 million in the first three quarters of 2022.
The Company had net income for the first three quarters of 2023 of $126.1 million, or income of $0.77 per basic share and $0.77 per diluted share compared to net income of $0.2
million, or income of $0.00 per basic share and $0.00 per diluted share in the first three quarters of 2022. The difference between the two periods mainly reflects higher tanker rates.
Net cash provided by operating activities for the first three quarters of 2023 was $209.1 million compared to $37.6 million for
the first three quarters of 2022. The increase was mainly due to net income of $126.1 million in the first three quarters of 2023 compared to net income of $0.2 million in the first three quarters of 2022, a
$26.7 million change in operating assets and liabilities and a $18.8 million increase in non-cash items included in net income.
Net cash used in investing activities for the first three quarters of 2023 was $126.0 million and was related to investment in vessels. Net cash provided by investing activities for the first three
quarters of 2022 was $112.2 million comprising $113.2 million related to sale of vessels and $8.3 million related to acquisition of subsidiary, net of cash paid, partially offset by $9.2 million related to investment in vessels.
Net cash used in financing activities for the first three quarters of 2023 was $135.0 million comprising $216.8 million related to repayment of long-term debt in connection with refinancing, $156.1
million related to cash dividends paid, $45.0 million related to prepayment of long-term debt, $18.8 million related to purchase of treasury shares and $15.6 million related to scheduled repayment of long-term debt, partially offset by $315.7
million related to issuance of long-term debt and $3.3 million related to proceeds from sale of derivatives. Net cash used in financing activities for the first three quarters of 2022 was $144.3 million comprising $73.1 million related to
prepayment of long-term debt, $25.5 million related to repayment of long-term debt in connection with sale of vessels, $24.8 million related to purchase of treasury shares, $13.2 million related to cash dividends paid and $7.0 million related to
scheduled repayment of long-term debt.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
The Company assesses the financial performance of its business using a variety of measures. Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include
amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are calculated using financial measures that are not calculated in accordance with IFRS. These non-GAAP measures include
“Adjusted Net Revenue”, “Adjusted EBITDA” and “Adjusted spot time charter equivalent per day”. The Company believes that these non-GAAP measures provide useful supplemental information for its investors and, when considered together with the
Company’s IFRS financial measures and the reconciliation to the most directly comparable IFRS financial measure, provide a more complete understanding of the factors and trends affecting the Company’s operations. In addition, DHT’s management
measures the financial performance of the Company, in part, by using these non-GAAP measures, along with other performance metrics. The Company does not regard these non-GAAP measures as a substitute for, or as superior to, the equivalent
measures calculated and presented in accordance with IFRS. Additionally, these non-GAAP measures may not be comparable to other similarly titled measures used by other companies and should not be considered in isolation or as a substitute for
analysis of the Company’s operating results as reported under IFRS.
|
USD in thousands except time charter equivalent per day
|
Q3 2023
|
Q2 2023
|
Q1 2023
|
Q4 2022
|
Q3 2022
|
2022
|
2021
|
|
Reconciliation of adjusted net revenue
|
|
|
|
|
|
|
|
|
Shipping revenues
|
130,322
|
151,993
|
131,468
|
166,522
|
108,227
|
450,381
|
295,853
|
|
Voyage expenses
|
(41,235)
|
(39,092)
|
(37,569)
|
(49,781)
|
(52,882)
|
(185,502)
|
(92,405)
|
|
Adjusted net revenues
|
89,087
|
112,902
|
93,899
|
116,741
|
55,345
|
264,880
|
203,448
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of adjusted EBITDA
|
|
|
|
|
|
|
|
|
Profit/(loss) after tax
|
30,967
|
57,081
|
38,041
|
61,819
|
7,457
|
61,979
|
(11,507)
|
|
Income tax expense
|
137
|
94
|
191
|
111
|
246
|
587
|
360
|
|
Other financial (income)/expenses
|
413
|
606
|
366
|
272
|
469
|
2,826
|
(645)
|
|
Fair value (gain)/loss on derivative financial liabilities
|
-
|
70
|
433
|
(56)
|
(2,788)
|
(14,983)
|
(12,450)
|
|
Interest expense
|
8,789
|
7,492
|
7,586
|
6,462
|
6,938
|
26,197
|
25,727
|
|
Interest income
|
(1,213)
|
(1,966)
|
(398)
|
(886)
|
(80)
|
(1,076)
|
(6)
|
|
Share of profit from associated companies
|
-
|
-
|
-
|
-
|
-
|
(1,327)
|
(1,278)
|
|
(Gain)/loss, sale of vessel
|
-
|
-
|
-
|
-
|
(6,829)
|
(19,513)
|
(15,153)
|
|
Depreciation and amortization
|
28,326
|
26,376
|
25,726
|
27,692
|
30,198
|
123,255
|
128,639
|
|
Adjusted EBITDA
|
67,419
|
89,753
|
71,946
|
95,414
|
35,610
|
177,946
|
113,688
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of adjusted spot time charter equivalent per day*
|
|
|
|
|
|
|
|
|
Spot time charter equivalent per day
|
44,700
|
64,800
|
54,600
|
63,800
|
22,000
|
29,000
|
13,200
|
|
IFRS 15 impact on spot time charter equivalent per day**
|
(2,400)
|
(3,000)
|
3,900
|
100
|
5,100
|
1,200
|
500
|
|
Adjusted spot time charter equivalent per day
|
42,300
|
61,800
|
58,500
|
63,900
|
27,100
|
30,200
|
13,700
|
* Per revenue days. Revenue days are the aggregate number of calendar days in the period in which the vessels are owned by the Company or chartered by the
Company less days on which a vessel is off hire.
** For vessels operating on spot charters, voyage revenues are calculated on a discharge-to-discharge basis. Under IFRS 15, spot charter voyage revenues are
calculated on a load-to-discharge basis. IFRS 15 impact refers to the timing difference between discharge-to-discharge and load-to-discharge basis.
EARNINGS CONFERENCE CALL AND WEBCAST INFORMATION
The Company will host a conference call and webcast, which will include a slide presentation, at 8:00 a.m. ET/14:00 CET on Tuesday,
November 7, 2023, to discuss the results for the quarter.
To access the conference call the participants are required to register using this link:
https://register.vevent.com/register/BI03951b6f02e34a2ba9283050284c5d35
Upon registering, each participant will be provided with participant dial-in numbers, and a unique personal PIN. Participants will need to use the conference access information provided in the e-mail received at
the point of registering. Participants may also use the Call Me feature instead of dialing the nearest dial-in number.
The webcast, which will include a slide presentation, will be available on the following link:
https://edge.media-server.com/mmc/p/gfwx2ori and can also be accessed in the Investor Relations section of DHT's website at http://www.dhtankers.com.
A recording of the audio and slides presented will be available until November 14, 2023, at 14:00 CET. The recording can be accessed through the following link: https://edge.media-server.com/mmc/p/gfwx2ori
ABOUT DHT HOLDINGS, INC.
DHT is an independent crude oil tanker company. Our fleet trades internationally and consists of crude oil tankers in the VLCC segment. We
operate through our integrated management companies in Monaco, Norway, Singapore, and India. You may recognize us by our renowned business approach as an experienced organization with focus on first rate operations and customer service; our
quality ships; our prudent capital structure that promotes staying power through the business cycles; our combination of market exposure and fixed income contracts for our fleet; our counter cyclical philosophy with respect to investments,
employment of our fleet, and capital allocation; and our transparent corporate structure maintaining a high level of integrity and good governance.
For further information please visit http://www.dhtankers.com.
FORWARD LOOKING STATEMENTS
This press release contains certain forward-looking statements and information relating to the Company that are based on beliefs of the Company's management as well as assumptions, expectations, projections,
intentions and beliefs about future events. When used in this document, words such as "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "will," "may," "should" and "expect" and similar expressions are
intended to identify forward-looking statements but are not the exclusive means of identifying such statements. These statements reflect the Company's current views with respect to future events and are based on assumptions and subject to risks
and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements represent the Company's estimates and assumptions only as of the date of this press release
and are not intended to give any assurance as to future results. For a detailed discussion of the risk factors that might cause future results to differ, please refer to the Company's Annual Report on Form 20-F, filed with the Securities and
Exchange Commission on March 23, 2023.
The Company undertakes no obligation to publicly update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, except as
required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur, and the Company's actual results could differ materially from those anticipated in these
forward-looking statements.
CONTACT:
Laila C. Halvorsen, CFO
Phone: +1 441 295 1422 and +47 984 39 935
E-mail: lch@dhtankers.com