DHT sees a significant profit fall

Aug 11 2017


DHT Holdings has reported a drop in net income to $4.8 mill for the second quarter of this year from $35.6 mill recorded in 2Q16.

Adjusted net revenue was $59.6 mill in 2Q17 down from $83.2 mill in 2Q16, while adjusted EBITDA was $36.7 mill as against $63.7 mill in 2Q16.

 

Interest bearing debt was $841.1 mill as at the end of June, compared with $613.1 mill at the end of the same period of 2016.

 

DHT's VLCCs achieved TCE earnings of $27,700 per day in 2Q17 of which the VLCCs on timecharter earned $37,000 per day and the VLCCs operating in the spot market achieved $23,500 per day.

 

For the first six months of 2017, the VLCCs achieved TCE earnings of $33,300 per day of which the timechartered VLCCs earned $37,900 per day and those trading in the spot market achieved $31,000 per day.

 

For 2Q17, the company will return $15.1 mill to shareholders, equating to 315% of net income. The return of capital is comprised of $12.2 mill of buy-back of convertible senior notes and $2.9 mill, or $0.02 per share, as cash dividends payable on 31st August, 2017 for shareholders of record as of 24th August, 2017. The outstanding amount under the convertible senior notes was $105.8 mill following the buy-backs.

 

During the period, DHT entered into a six year term loan and revolving credit facility agreement totalling $300 mill, of which $74 is a revolving credit facility, with ABN Amro, DNB, Nordea, Danish Ship Finance, SEB, ING and Swedbank for the financing of the cash portion of the acquisition of the VLCC fleet from BW Group, as well as the remaining instalments on the two newbuilding contracts.

 

Around $204 mill was drawn in connection with the delivery of the nine vessels in the water and the remaining $96 mill is expected to be drawn in connection with the delivery of the two newbuildings in the second quarter of 2018. 

 

Borrowings bear interest at a rate equal to Libor + 2.4% and are repayable with quarterly instalments calculated based on the borrowings being repaid to zero assuming a 20-year economic life for the vessels. 
 

In June, the company completed the delivery of the nine VLCCs acquired from BW, while the contracts for the two newbuildings, due for delivery in 2018, were transferred to DHT. DHT has a fleet of 30 VLCCs, 26 in the water and four under construction scheduled for delivery next year, plus two Aframaxes.

 

The same month saw DHT enter into a finance agreement with DNB and Nordea totalling $82.5 mill to fund the acquisition of the two VLCC newbuildings ordered from HHI in January, 2017. The five year credit facility is divided 50/50 between a term loan and a revolving credit facility and borrowings will bear interest at a rate equal to LIBOR, plus a margin of 250 basis points. Borrowings are repayable with quarterly instalments calculated based on the borrowings being repaid to zero assuming a 20-year economic life for the vessels.

 

Also in June, the legal action filed by Frontline in the High Court of the Republic of the Marshall Islands, which challenged DHT's transaction with BW and DHT's Rights Plan, was dismissed, with prejudice.  

 

Frontline is now precluded from bringing similar claims against DHT, its directors and BW in any other court. Under Marshall Islands' law, the dismissal also constitutes a ruling on the merits in favour of DHT.  



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