DHT reports stronger results

May 06 2016

DHT Holdings has reported an EBITDA for the first quarter of this year of $61.4 mill and net income of $31.5 mill, which included an impairment charge of $8.1 mill related to the sale of the 2001 built Suezmax, ‘DHT Target’.

During 1Q16, the company’s VLCCs operating in the spot market achieved TCEs of $62,600 per day.

Shipping revenues for 1Q16 were $107.6 mill, compared to $95.6 mill in 1Q15. The increase was due to a stronger market, as well as an increase in the fleet with the delivery of three VLCCs, offset by the sale of the Suezmax.

Voyage expenses were $17.3 mill, compared to $22.2 mill in 1Q15, which was mainly due to lower bunker costs for the vessels in the spot market offset by more vessels in the spot market in 2016.

Vessel OPEX was $14.3 mill, compared to $15 mill in 1Q15. The reduction was due to an overall more cost efficient fleet with the delivery of the newbuildings and sale of the 2000-built Suezmax,  despite an increase in the fleet.

Net cash provided by operating activities was $58.9 mill, compared to

$42.8 mill for 1Q15. This rise was mainly due to higher freight rates and an increase in the fleet in 2016.

As of 31^st March, 2016, DHT’s cash balance was $77.5 mill, compared to $166.8 mill as at 31^st December, 2015.

On 4^th January and 15^th March, 2016, respectively, DHT took delivery of the second and third of its six VLCC newbuildings from Hyundai Heavy Industries (HHI). Both vessels - ‘DHT Leopard’ and ‘DHT Lion’ - are trading in the spot market. The remaining three newbuildings will be delivered from July to October, this year.

They are all fully funded and are expected to contribute significantly to the company's earnings power, DHT said.

In 1Q16, DHT pre-paid the credit facility for ‘DHT Hawk’ and ‘DHT Falcon’ in full, - $42 mill, as well as a $4.9 mill pre-payment on the RBS credit facility.

In April, 2016 the company agreed to sell the ‘DHT Target’, a 2001-built Suezmax for $22.5 mill and the vessel will be delivered to the buyers in May, 2016.

This sale is in support of the company's fleet renewal programme and took place during a period in which three VLCC newbuildings were delivered since November, 2015 and three further VLCC newbuildings will be delivered by October, 2016.

An impairment charge of $8.1 mill was recognised on the reclassification of the vessel as asset held for sale in 1Q16. The net proceeds will be used to repay debt under the RBS facility being in support of DHT’s capital allocation policy and $22.3 mill has been recorded as current portion of long term debt as of 31^st March, 2016.

Of the 19 tankers in operation, six of the VLCCs and the two Aframaxes are on fixed rate timecharters while 11 VLCCs have spot market exposure.