DHT Holdings, Inc. Business Update

Rhea-AI Summary

DHT Holdings, Inc. (NYSE:DHT) has provided a business update for the second quarter of 2024. The company estimates time charter equivalent earnings at $49,100 per day across its fleet. This includes $52,700 per day for VLCCs in the spot market and $36,400 per day for those on time-charter, based on 2,114 revenue days, of which 1,644 are spot days. For the third quarter thus far, 48% of available spot days have been booked at $45,600 per day and 61% of total available revenue days at $42,300 per day. Additionally, DHT entered a one-year time charter contract for the DHT Europe at a rate of $49,500 per day, servicing a European refinery. The company has also expedited the delivery of four new VLCCs, now expected between February and July 2026, increasing projected revenue days in 2026.

Positive

• Estimated time charter equivalent earnings of $49,100 per day for Q2 2024.
• One-year time charter contract for DHT Europe at $49,500 per day.
• Expedited delivery of four new VLCCs between February and July 2026.

Negative

• Average time charter equivalent earning for Q3 2024 thus far is lower at $42,300 per day.

Financial Analyst

Financial Performance: DHT Holdings' second-quarter performance demonstrates strong $49,100 per day earnings across its fleet. Notably, spot market rates at $52,700 per day outshine time-charter rates at $36,400, highlighting the volatility and potential rewards of the spot market. With 1,644 out of 2,114 revenue days tied to spot activities, the company strategically leverages market dynamics to maximize earnings.

Future Projections: Booking 48% of available spot days in Q3 2024 at an average rate of $45,600 per day showcases robust near-term visibility. However, the average booking rate of $42,300 per day combining both spot and time-charter days implies a conservative outlook, possibly hinting at market uncertainty or seasonal variations.

Long-Term Contracts: The time-charter contract for DHT Europe at $49,500 per day, servicing a European refinery, is a clear move towards revenue stability. Time charters, generally less volatile, ensure predictable cash flows and reduce earnings volatility—a critical aspect for investors seeking long-term visibility.

Conclusion: Overall, DHT Holdings' strategic mix of leveraging the spot market while securing time-charter contracts and increasing fleet size should provide a strong foundation for sustained revenue growth. Potential investors should monitor the company’s ability to manage new vessel deliveries and market conditions effectively.

Shipping Industry Analyst

Spot Market vs. Time-Charter: The significant difference between spot market earnings ($52,700 per day) and time-charter earnings ($36,400 per day) underlines the potential profitability and risk of the spot market. This disparity is common in the shipping industry, driven by fluctuating demand for tanker services and global trade patterns. Spot market operations allow DHT to capitalize on favorable market conditions quickly.

Fleet Expansion: The expedited delivery schedule for four new VLCCs in 2026 positions DHT to expand its market presence decisively. These large vessels, important for transporting crude oil, will enhance the company’s capacity to meet growing demand, especially if global oil consumption maintains an upward trend. However, accelerated deliveries also mean early capital outlays and potential financing considerations.

Strategic Implications: Entry into long-term contracts with reputable clients like European refineries ensures steady cash flows and reduces counterparty risks. This move is prudent, considering the cyclical nature of the industry. Additionally, focusing on the Atlantic basin—a key oil-trading region—aligns with strategic deployment and efficient fleet utilization.

Conclusion: DHT's strategy to balance spot market activities with secure time-charter agreements and fleet expansion appears sound. Investors should remain aware of the inherent market risks and monitor global economic indicators, which heavily influence tanker demand and rates.

HAMILTON, BERMUDA, July 11, 2024 – DHT Holdings, Inc. (NYSE:DHT) (“DHT” or the “Company”) today provides the following business update:

For the second quarter of 2024, the Company estimates time charter equivalent earnings for its fleet at $49,100 per day, comprising of $52,700 per day for the Company’s VLCCs operating in the spot market and $36,400 per day for the Company’s VLCCs on time-charter. The estimated time charter equivalent earnings are based on 2,114 revenue days for the second quarter, of which 1,644 days are spot days.

Thus far in the third quarter of 2024, 48% of the available spot days have been booked at an average rate of $45,600 per day on a discharge-to-discharge basis. 61% of the available revenue days, spot and time-charter days combined, have been booked at an average rate of $42,300 per day.

In the second quarter of 2024, the Company entered into a one-year time charter contract with a refining company for DHT Europe, built 2007. The time charter contract has a rate of $49,500 per day and the vessel is intended to trade in the Atlantic basin, servicing a European refinery.

As previously announced, the Company has entered into agreements to build four large VLCCs with originally expected delivery between April and December 2026. The expected delivery has been expedited, hence increasing revenue days in 2026. We expect the first vessel to be delivered in February, the second vessel in April, the third vessel in May and the fourth and final vessel is expected to be delivered in July 2026.
  

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 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 SEC on March 20, 2024.

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

 

 

FAQ

What are the estimated earnings for DHT Holdings in Q2 2024?

For Q2 2024, DHT Holdings estimates time charter equivalent earnings at $49,100 per day.

How much are DHT Holdings' VLCCs earning in the spot market for Q2 2024?

DHT Holdings' VLCCs in the spot market are earning $52,700 per day for Q2 2024.

What is the average rate for DHT Holdings' available spot days in Q3 2024 so far?

The average rate for DHT Holdings' available spot days in Q3 2024 so far is $45,600 per day.

What new contract has DHT Holdings entered for DHT Europe?

DHT Holdings entered a one-year time charter contract for DHT Europe at $49,500 per day, servicing a European refinery.

When are DHT Holdings' new VLCCs expected to be delivered?

DHT Holdings' new VLCCs are expected to be delivered between February and July 2026.