DHT (DHT) 11 Aug 222022 Q2 Earnings call transcript

Good day and thank you for standing by. Welcome to the Q2 2022 DHT Holding’s Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. advised conference be being Please Instructions] that is today's recorded. [Operator the now to like would conference to Halvorsen. I Laila hand over today, your speakers ahead. go Please

and Harfjeld. DHT Thank you by earnings DHT's Good morning CEO, good joined everyone. you. Svein and Moxnes and call. I'm for second Holdings Welcome joining President quarter XXXX afternoon, thank

slide open your questions. dhtankers.com. The As usual, financials through our for go be and some on to up the deck we will highlights can found before we link website,

call, today's following with until would like of started conference the get we be dhtankers.com, I to make our remarks. this Before August XXth. website, replay A available call will at

X-K. will on addition, earnings system exhibit EDGAR In on Form our an be the press SEC website and release as our our available to

at vessel June the million quarter-end, and current XX% revolving to we in call, our on for materially current our We quarter system, based including was from as about detailed At on $XX.X these As discuss ships nature. on that is facilities cash. and healthy availability EDGAR liquidity SEC expectations about financial values. face. well-below periodic end, results this will report. regarding quarter total urge the in information our very forward-looking credit at risk website forward-looking per market debt as differ a factors $XXX available $XXX putting more reminder, the continued matters expectations The on XXth. of forward-looking both are Financial our read million balance reflected on reports under statements the which of based in reports Actual the in These is conference risks ended to leverage and company you strong show we future $XXX scrap events, sheet are million that with these and for company's million, the a net values may was statements.

quarter was gain a include the a in $X.XX earning average rate income million, with in $XX.X second equal company of million, results per $XX,XXX P&L the to and sale per quarter came day. fair TCE equal second vessels to with and in EBITDA at $XX,XXX the G&A the quarter cost the day at million. the the OpEx $XX,XXX related for at the and highlights. $XX of related day and for company vessels earning per per the at The continues control gain $XX $X.X an achieved Looking $X,XXX derivatives. day time value The good market, In to quarter, interest charter on for to with share. spot non-cash vessels million net per the

of vessels For second Falcon sales, available of average two million. have for The million. net an combined outstanding with million, the delivered sales an sold the vessels $XX.X proceeds the at days during a vessels quarter two $XX day, the during gain third of million. of Both rate rate and XX% were $XX.X repaid debt $XX.X on respectively. per spot booked days $XX,XXX at have DHT of DHT XX% average available of Hawk per and booked been $XX,XXX quarter, been We quarter, million In and amounted generated the we $XX to and connection the day.

used June, under was revolving In reborrowed. The part and proceeds of made AER were our to these reduced debt. reduce we of Following prepaid million $XX.X may prepayment the Nordea fleet been net average EEOI facility voluntary sales, tranche and the age credit the the has Credit be improved, and under our Facility. metrics

million to amounted and vessels million repayment to debt. Ordinary started $XX.X to for the the buyback in cash $XX.X for generated and $X.X million bridge and from shareholders EBITDA. $X.X the was from initial payment. [ph] was quarter of million proceeds with we debt the of now with was the was, million cash slide, next while million the cash. quarter $XX.X long-term and allocation. through On million. sale as allocated used net million present we interest cash We $XX.X CapEx, cash maintenance $XX.X previous $X.X the while dividend slides recognition share prepay of million, Switching used we to to Gida capital amounted mentioned ended $XXX.X on quarter.

X.X% number quarter, XX for purchased shares the $X.X as company of of shares aggregate of the of to an consideration second outstanding own million its $XX.X During million. equal March the of

for of pay record company the share dividend the quarter. quarterly turn August cash the to that, I'll as consecutive XXth a $X.XX over August be addition, XX per call marks will on dividend. Svein. XX. of In It will payable of With the shareholders to This

Thank you, Laila.

share after back stock repurchases end quarter, the second the we during buy Following quarter by the discussed Laila, continue conducted as XXbX-X rule. to under

total been of shares, aggregate an the price consider bought We average per all price Considering cost million, made to great a of share. X% $X.X these shares average receipt. investment. of the conducted equaling million at close be have have of we third retired an of some total, repurchases accretive an quarter-to-date this is and upon per and We company's XX million consideration capital. to The in buybacks in $X.XX at have $XX XXXX million And back X.X some share. $X.XX acquired buybacks shares year-to-date,

life for XX-year software the DHT the existing borrowing plus in a and secured During software to credit It new the The ship. financing made DHT's quarter, facility six is year LIBOR. pricing at up of Agricole. represents the XX the we of of structure margin agreed financing. overnight lender spread $XX.X as historical the low million DHT the with with of The bps X.XX%. also Credit rate adjustment a referred profile. for between years costs and a credit a repayment includes million tenor to $X.X line Stallion of The Tiger bilateral remaining refinance per

LIBOR, to a for margin this typically our fleet. have equal of spot is We a and is plus XXX reference a bps. LIBOR new you replace this that note of As and employment that mix pricing fixed will for a structure should

formulaic However, one employed tenors the with to another the business. and focus in contribute rates it not of on the the but our percentage meaningfully fleet way that, view, the or nominal is will

tenure, a have charter We respectively. key into $XX,XXX an to two XX,XXX DHT options August five-year for per at and has attraction XX,XXX to customer years the is entered day, for The and time Delivery additional planned Osprey day. extend for engage at the per charter. if with level and inquiries when of customers, this rate will this we find two attractive a time-charters would business and our see be meaningful selectively conducted. an time-charter is We three-year increased the not or can as for for

the this decreased average an in costs, committed our work equipment the year. This each executed for of early first elevated have XX completion to plan days or the team XX is current expected We efficient and with of be take. vessels to go-to for million spreads next a between sulphur fuel heavy Considering in retrofit these the fourth these delivery fuel combination be one and we take of will $XX fitted low to in a scrubbers. of on the inside payback makes The of experienced compelling We continued by with investment oil very & chips scrubber during that out additions our total our completion, will the and service a view. highly earnings boost Fujairah schedule oil ship company. spreads year. Singapore, will shipyards. a scrubbers quarter of commence quarter, The a we investments give should Upon at have expect additional

to continue and disciplined, all So focusing strategy. includes we blocks business to delivering sum shareholders. our of in it for our on value key execution stay up, building This model

strongest tanker sheet market with liquidity, given markets enabling reduced program act value. away should an amongst through This arise, the for buybacks with structure to a that probably robust downside has opportunities structured well The without peer And in tuned us actions Ample balance expanded the and outstanding shares will to protection and they are the our this includes on all business the We cyclical of upside. and invest earnings. having and started. number scrubber create fast-track for recovery boost we are recovery through group.

significant leverage Operator? that, we business, questions. up a operating potential. substantial for distribution And in open the with have combined with We capital

And Please go Jefferies. Instructions] now [Operator the will you. comes from take We question first from Nokta question. the first Thank ahead. of Omar line the

line Your is open.

you as compelling. least you. in afternoon. the characterize and Svein. Laila. type -- at or for Hi, Yes. time sort ask, How a five-year the don't decade-plus. least, I I haven't think, that you Thank would sort past it of charter several this or liquidity we the the you Svein, has recovery the seen know, Clearly, made Good Hi, I markets on wanted activity of that so the charter duration today, would at durations to years begun. of mentioned, just much contract touched

necessarily VLCC We in seen haven't is time a point? how but say this would you spot at charter the market resurgence rates,

for The sort is very, liquidity of time very thin. this really

incoming asking want And -- are don't lot it's discussions found maybe two attractive. we what to quite to us. specific Obviously, expect and discussions of very this in very on We for clients always we that charter have a year So to five-year hard There beyond find that, constructive we a number. shorter sort next are XXXX. few for to additional for one, is there attractive. options but also years, of Hence, sort of a durations. or be some

income. be So, will increased build rates will time, be and delivery. be we, going fixed that forward But will forward, with over more it at that also maybe it could hopefully,

your for But thin to liquidity So so. see. let's point, is now,

maybe Okay. seen and just highlighted of clearly All We've a as midsized you broadly product then, market lifted, tankers you. tankers the the more Thank crude sort on bit itself. right. in the release. the follow-up And a

you call from in four can within how the sense of market a weeks, maybe East give Middle that's developing the levels recently, been just of of out maybe Atlantic the what out your past, seeing six VLCCs, lens you're -- the activity the maybe and to here terms On how of terms maybe of in then it, Basin?

rise clearly the are on the and up. is rates market the moving So

sort latter than the of are what So, at part higher part. rates booked, have of earlier we the

We are rate what we have we higher voyages than booked spot in quarter-to-date. the negotiating average as meaningfully discussions at on speak,

in and smaller a rates, super change see of direction. you the not -- Atlantic mix this robust. And both but as right can is a to in going in on the So and ships, Asia. it's there fast-moving [indiscernible] looks in certainly It's be volatile like

to here about year this And weeks. a half quarter fourth think in And next has quarter and this will steeply backwardation point between year load key to I is see Atlantic while. a the then backwardated few is the some last we been our certainly Asia. that for of quite oil the the go that And this fourth and markets. US more requests and And in Asia. into in enable course, for barrels long some discharge of good already to will be haul

I'll Okay. for it Thank that Svein. you turn color, over.

you. Thank

Thank you.

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Hi, Svein. you. Thank

you from tankers, tank the impacting you million the to barrels morning, this per report second going backwardation, made me, To in positive be expect the would to day actually build for the hear Regarding wanted of global read predict how next they to actually barrels inventory market final I forward? first comment on and year. year IEA just but half dynamics be million I this of and half in this of X.X to close now very seems you, this the the one

agree certainly you. with We

during over conference. we oil inventory years the know, in many to now. metric key the there more we And feedstock, many, inventories some And have tanker understanding this So the Money you as on and that prior point, also call been is cycle. spoke down about cycle brought all our has be think at the Marine

are all good of big on demand with the in being into So think and new truly large will handled XX% should business the of positive. Asia. this VLCCs VLCCs picture likely a real fundamental is be refineries, Atlantic have market. certainly we supply, There and long ones if from VLCC the really tankers. oil, a for about being you transported, or being be crude This crude is more more workhorse perspective. the average XX%, still certainly like, this and

very some of ships smaller are the Ukraine. will between this volatilities enjoy period and from overall, constructive disruptions, we forward. although, of But following course, Russia are seeing we on benefits still So, the going

you've been That's sense buying ship your Agree. announced with and back investment shares Yeah, which scrubbers, makes own now to great. in me. totally

you since if know there's I'm the did to last me quite in to good development versus be On obvious been price benefits. curious the any the to the scrubbers, technology seems retrofits a

washing in meters These So handle machines really the tanker, XX,XXX are the sort water the it's was the cost simple. -- per but them. machines had of with higher are new scrubbers handy-size cost of probably a higher fairly day, No, model to profit essentially washing the of or The very think of development. capacity not cubic high for the it back, a was few building them years margins much I has thing, it don't producer, a down. a on very but they and right? come

of time. are at to than a did our cost available they what suppliers one two much So key now last us at we lower

CapEx. in per will to we XXXX do by ship which this, see year, you So a €X over just improvement million right, is that significant budget

basically So the our technology is same.

change. no there's So

Perfect. Thank That’s you. it.

you. Thank

question. Masaga next from Please ahead. [ph] And comes FactSet go take We of the will from line it Jim the now

from Your Jim please. line is Masaga FactSet open.

to line go go it question. will the from Chappell of Please from standby. the And ahead. Evercore. Jon We comes next Please

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can Laila, of you. start with Thank you. just questions I for a modeling couple

I the quarter. third of Is today. all, that is I my for? missed First spot what thought And XX,XXX the percentage caught that I for correct? apologies,

spot? a Just

spot the part. just Yes,

Yes.

the yes, spot the XX,XXX. XX% -- was at So

four you reset regarding depreciation Okay. then depreciation how Thank said will for to assume about it How fourth we four the model much days and completed? those? the we then, retrofittings, Svein, in the should my you. the is, And quarter, should the once question the higher scrubber of And other in first? think scrubbers the roughly turn

a the possible. the exactly it's to ships which this how in we we we bit schedule yard day and will depend So, want to will market, the as enter spot as close discharge

a can ships fourth six this, in the we it's quarter. quarter, say to Jon. if bit -- So so But we hard it the fourth in do do will

very be precise, to but So quarter sorry able we not first in schedule. more fourth being the the are confident and

But limited at will is the sort you precise you afraid. way a of you is and So ready equipment want, more can't yard ready. this but we be to the I'm do give guidance.

little want we possible, we quarter. do sooner, get can as if be sooner, So if out, it positioning dried but as off-hire fleet might optimize to it it it to the will do beyond and will we not be first cost the

reasonable this finalized did look think I on so yes, third quarter profile, last time, the depreciation was results, lead will but quarter the depreciation to On we a at which yet, we the on communicate but -- it's profile, what a three-year not it's

we the far Okay. of And mean, on moved before then talked final VLCCs have least it question. asset deployment in quarter rates with about this bigger seems in. It situation the values picture the and last comes have as themselves. sign at the I cash

today. months attractive an probably investment, six ago, So to ships there just nine less was even so maybe mathematically,

that stock in there. NAV priority You've to would and the made significant that catch you capital point, return you're go rates this at firmly do thinking assets don't headway to longer-term point, your short-term? remain Clearly, ways to think is up there's say asset a have if with the top the start less making values in even is certain or in a you you investments start the that to at pivoting buyback, cash, than and of the and necessarily

a from excited trial comes to I it when we not values buying the current about investments, are think perspective.

going stock, very to to comes here. course, buying So if moving is it our be buy has NAV it also back special to we a opportunities of When are something. element own

capital trading be be policy reduce as net $X ordinary done everybody what all level further. with happy we today. of which debt XX% to minimum I very well could stock below think allocation mark It But where of the knows, stayed and income are is distributed. sort will compares to we our have that the So even we

think will I level And current the key two, buy should think metrics. But expect to don't we buy valuations. So at current are us side. sort the those stock one, not I the you in ships probably of

to We then focus that the will of on investors our and returning future. shareholders to sort leave in money

that of we a in out loss. dividend gains, quarter last $X.XX, to Okay. is a take follow-up it was still of point. kind last to a off and minimum, is if $X.XX certainly My speak so your one where

as more stages the think we sustainably now profitability? then the new a else minimum should of to the all once recovery, in stays about same kind we're and is So of you're payout the early dividend assuming we'll transition $X.XX XX% in base that

inputs, that sale is P&L sort exclude we include profit, in quarter in on based net the when the tend peers, of compared the don't to elements we consider dividend. that XX% income a The some cash is the this of No. such ship reported actually our because of to as we

this us, is for the So it. we've always done just way

It's So the pure it's law. of what just a the a for income not was reflection new quarter.

Thank Okay. That sense. you, makes Svein. Laila. Thanks,

the We'll take line Kepler of Please from comes Anders the ahead. from you. the Cheuvreux. next now go question. Thank question Karlsen next And

open. is line Your

your fleet. with built Thank the the I or or sales, now? considering is you. XXXX to question more you A less sold same that firming XXXX table on more the mean, you and quick in have are ones off market ship, you

in very we opportunity but selective. earn in we'd or particular, both which I the to be But think give two scrubber to that I sell asset ships for the to ships. expect for of these have we one units, we It will course, do. elect could, like also now, values, them XX be to think money, appreciation see them

plan So smaller what fleet be I for don't than it to today. is much our think should you

drivers is that here? holding the then liquidation Okay. you one back. on you What the one just a market, quick term in important factor see other And do as mentioning short were

is there course, supply. Of

key the that, oil tight sort they market. is Their is macroeconomic a of feel picture. that meeting they OPEC And questioning argument bit handing on current amount. So they're into the are more

suggesting pivots might the is last they we'll these If sort more that prices concerns. back assume oil macroeconomic long maybe getting have think days, to things been which here there, they some enjoy as that's been the the the has prior seen inflation market. maybe of reason couple of I of tight, that to key OPEC strong holding some case, be to and is I and ease off as the is of some we've we that But for think ride the can. leveling wanted

you. pool have from on a I in just I inventory? EU hands everything short any build the Thank of an – require you guess, And from to final Okay. is their security EU and would seen mean, question substantial can get on. they of then perspective, terms building energy inventories energy

you as have of that So seen are? we any signs

can't I've say No, I seen that.

So for the a been more topic of gas course, has hot Europe. of

oil transportation, really production, is because heating for – like for used so for – petrochemicals. and it's So not for much more energy or

So other focus. I areas think there where seen this are you've

me. all you. Okay. Thank That's for

Thank you.

We next by. will take now stand the question. Please

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is line open. Your

taking commentary effect questions. ask Good transfers the from considering could disruptions the their some heading sanctions mostly you're ports. in about morning. overall I on around for VLCC's the And to you market? the ship-to-ship provide to revolve vessels, and seeing on wanted Western you thank the my Russia's But Russia, smaller effect

We we place taking not are types in Basin. involved that been Atlantic operations, those the aware are in they've of but

China Baltic but mass, been our is also But business. coming in it's a these is the Aframax with up being many, then, think Far the on say, Sea done. tying it's been, and then few a to this we VLCCs ships. East particular of and use many we Black it to to mainly a of potentially There's there's transport business not Baltic do the out and And destination. load transactions So knowledge, the huge being it could

of it's market. So sideline a the the bit on conventional

natural right. volumes do substitution additional That's in winter? considering see coming gas the helpful. any this import Europe, All to energy during And crude high expect for prices you

of It could, happen. course,

for So used there the this will are some be oil suggestions that fuel winter. heating

least So not it sort of haven't or at we to seen clear our knowledge. -- any but of evidence

defined heating gas. oil but and by also -- I differential between cost will So the think be this

All right. taking me. That's much questions. you very all Thank for for my

Thank you.

line ahead. [Operator We It Masco comes MRM Michael Instructions] from from Please go take you. Thank next will Capital question. the of now [ph]. the

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…question-and-answer. Thank you.

no problem. speakers to questions Thank final the more this There for would hand like are No I remarks. at the back time. to you. conference

who's to greatly call the That's thank been following you and everyone Well, on all appreciated of are day good DHT. and a you wishing ahead.

for conference today. for That does conclude participating. you our Thank

all may You disconnect.