CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED)
($ in thousands)
| | | | Q4 2019 | | Q4 2018 | | 12 months 2019 | 12 months 2018 |
| | Note | Oct. 1 - Dec. 31, 2019 | Oct. 1 - Dec. 31, 2018 | Jan. 1 - Dec. 31, 2019 | Jan. 1 - Dec. 31, 2018 |
| CASH FLOW FROM OPERATING ACTIVITIES | | | | | | | | | |
Net income / (loss) after tax
|
| $
| 75,862
|
| 11,983
|
| 73,680
|
| (46,927)
|
| |
|
|
|
|
|
|
|
|
|
| Items included in net income not affecting cash flows |
|
| 29,790
|
| 36,478
|
| 134,929
|
| 128,980
|
| Depreciation | 5
|
| 30,663
|
| 28,251
|
| 115,584
|
| 103,476
|
| Impairment charges | 5
|
| -
|
| -
|
| -
|
| 3,500
|
| Amortization of debt issuance costs |
|
| 1,930
|
| 2,010
|
| 8,003
|
| 11,559
|
| (Profit) / loss, sale of vessel |
|
| -
|
| (122)
|
| -
|
| (75)
|
| Fair value (gain) / loss on derivative financial instruments | 4
|
| (2,990)
|
| 6,222
|
| 9,863
|
| 5,191
|
| Compensation related to options and restricted stock |
|
| 454
|
| 334
|
| 2,331
|
| 2,599
|
| (Gain) / loss purchase of convertible bond | 6
|
| -
|
| -
|
| -
|
| 3,589
|
| Share of profit in associated companies |
|
| (267)
|
| (217)
|
| (852)
|
| (858)
|
| Income adjusted for non-cash items |
| $
| 105,651
|
| 48,461
|
| 208,610
|
| 82,052
|
| |
|
|
|
|
|
|
|
|
|
| Changes in operating assets and liabilities |
|
| (55,792)
|
| (20,142)
|
| (52,653)
|
| (28,067)
|
| Accounts receivable and accrued revenues | 8
|
| (52,872)
|
| (19,199)
|
| (47,651)
|
| (25,421)
|
| Capitalized voyage expenses |
|
| (1,658)
|
| (219)
|
| (2,518)
|
| 255
|
| Prepaid expenses |
|
| (1,470)
|
| 3,500
|
| (508)
|
| (1,141)
|
| Accounts payable and accrued expenses |
|
| 5,767
|
| 216
|
| (1,137)
|
| 8,267
|
| Deferred shipping revenues |
|
| 930
|
| (2)
|
| 930
|
| -
|
| Bunkers, lube oils and consumables |
|
| (6,489)
|
| (4,418)
|
| (1,874)
|
| (9,994)
|
| Pension liability |
|
| (1)
|
| (20)
|
| 105
|
| (34)
|
| Net cash provided by operating activities |
| $
| 49,859
|
| 28,319
|
| 155,956
|
| 53,985
|
| | | |
|
|
|
|
|
|
|
| CASH FLOW FROM INVESTING ACTIVITIES | | |
|
|
|
|
|
|
|
| Investment in vessels |
|
| (20,493)
|
| (10,131)
|
| (53,803)
|
| (11,845)
|
| Investment in vessels under construction |
|
| -
|
| (57,800)
|
| -
|
| (223,033)
|
| Sale of vessels |
|
| -
|
| 25,678
|
| -
|
| 46,393
|
Investment in associated company
| | | 513
|
| 409
|
| 513
|
| 409
|
| Investment in property, plant and equipment |
|
| (31)
|
| (4)
|
| (79)
|
| (88)
|
| Net cash used in investing activities |
| $
| (20,011)
|
| (41,848)
|
| (53,369)
|
| (188,165)
|
| |
|
|
|
|
|
|
|
|
|
| CASH FLOW FROM FINANCING ACTIVITIES |
|
|
|
|
|
|
|
|
|
| Cash dividends paid | 7
|
| (7,340)
|
| (2,872)
|
| (28,685)
|
| (11,487)
|
Repayment of lease liability
| | | (129)
|
| -
|
| (370)
|
| -
|
| Issuance of long-term debt | 4
|
| 10,000
|
| 54,953
|
| 64,990
|
| 577,685
|
Purchase of treasury shares
| 7
|
| -
|
| (5,026)
|
| (3,248)
|
| (5,026)
|
| Issuance of convertible bonds | 6
|
| -
|
| (401)
|
| (7)
|
| 38,945
|
| Scheduled repayment of long-term debt | 4
|
| (16,694)
|
| (16,051)
|
| (64,175)
|
| (53,002)
|
Prepayment of long-term debt
| 4 | | (57,254)
|
| -
|
| (92,254)
|
| -
|
| Repayment of long-term debt refinancing | 4
|
| -
|
| -
|
| -
|
| (377,935)
|
Repayment of long-term debt, sale of vessels
| 4
| | -
|
| (8,685)
|
| -
|
| (17,348)
|
Repayment of convertible bonds
| 6
|
| (6,426)
|
| -
|
| (6,426)
|
| -
|
| Net cash (used in)/provided by financing activities |
| $
| (77,844)
|
| 21,917
|
| (130,176)
|
| 151,832
|
| |
|
|
|
|
|
|
|
|
|
| Net (decrease)/increase in cash and cash equivalents |
|
| (47,995)
|
| 8,388
|
| (27,588)
|
| 17,652
|
| Cash and cash equivalents at beginning of period |
|
| 115,352
|
| 86,556
|
| 94,944
|
| 77,292
|
| Cash and cash equivalents at end of period |
| $
| 67,356
|
| 94,944
|
| 67,356
|
| 94,944
|
| | | |
|
|
|
|
|
|
|
| Specification of items included in operating activities: | | |
|
|
|
|
|
|
|
| Interest paid | | | 11,082
|
| 10,794
|
| 49,233
|
| 40,040
|
| Interest received | | | 357
|
| 120
|
| 1,077
|
| 345
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (UNAUDITED)
($ in thousands except shares)
| | Note | Shares | | Stock | | Paid-in Additional Capital | | Treasury
Shares
| | Retained Earnings | | Translation Differences | | |
| Non-
Controlling
Interest
| | Total Equity |
Balance at January 1, 2018, as previously reported
| | 142,417,407
| $
| 1,424
| $
| 1,140,794
| $
| -
| $ | (222,087)
| $
| 85
| $
| 5,676
| $
| -
| $ | 925,892
|
Impact of change in accounting policy
|
| | | | | | | | | (4,734) | | | | | | | | (4,734) |
Adjusted balance at January 1, 2018
| | 142,417,407 | | 1,424 | | 1,140,794 | | - | | (226,821) | | 85
| | 5,676 | | - | | 921,158 |
| Net income/(loss) after tax | |
|
|
|
|
|
| | | (46,927)
|
|
|
|
|
| | | (46,927)
|
| Other comprehensive income | |
|
|
|
|
|
| | | (148)
|
| (53)
|
|
|
| | | (201)
|
| Total comprehensive income | |
|
|
|
|
|
| | | (47,075) |
| (53) |
|
|
| | | (47,128)
|
| Cash dividends declared and paid | |
|
|
|
|
|
| | | (11,487)
|
|
|
|
|
| | | (11,487)
|
Purchase of treasury shares
| |
|
|
|
|
|
| (5,026) | |
|
|
|
|
|
| | | (5,026)
|
Retirement of treasury shares
| | (892,497)
| | (9)
| | (3,654) | | 3,662 | | | | | | | | | | (0) |
Issuance of convertible bonds
| | | | | | 3,165 | | | | | | | | | | | | 3,165 |
| Purchase of convertible bonds | |
|
|
|
| (1,613)
|
| | |
|
|
|
|
|
| | | (1,613)
|
| Compensation related to options and restricted stock | | 1,175,136
|
| 12
|
| 6,414
|
| | |
|
|
|
| (3,827)
|
| | | 2,599
|
| Balance at December 31, 2018 | | 142,700,046
| $
| 1,427
| $
| 1,145,107
| $
| (1,364)
| $ | (285,383)
| $
| 32
| $
| 1,848
| $
| -
| $ | 861,668
|
| | |
|
|
|
|
|
| | |
|
|
|
|
|
| | |
|
| Balance at January 1, 2019 | | 142,700,046
| $
| 1,427
| $
| 1,145,107
| $
| (1,364)
| $ | (285,383)
| $
| 32
| $
| 1,848
| $
| - | $ | 861,668
|
| Net income/(loss) after tax | |
|
|
|
|
|
| | | 73,679
|
|
|
|
|
| 2 | | 73,680
|
| Other comprehensive income | |
|
|
|
|
|
| | | 224 |
| 42
|
|
|
| | | 265
|
| Total comprehensive income | |
|
|
|
|
|
| | | 73,903 |
| 42
|
|
|
| 2
| | 73,946
|
| Cash dividends declared and paid | |
|
|
|
|
|
| | | (28,685)
|
|
|
|
|
| | | (28,685)
|
Purchase of treasury shares
| |
|
|
|
|
|
| (3,248)
| |
|
|
|
|
|
| | | (3,248)
|
Adjustment related to non-controlling interest
| | | | | | | | | | | | | | | | 3 | | 3
|
Retirement of treasury shares
| | (1,061,241)
| | (11) | | (4,602) | | 4,612 | | | | | | | | | | -
|
Conversion of convertible bonds
| | 4,390,025
| | 44
| | 26,391
| | | | | | | | | | | | 26,435 |
| Compensation related to options and restricted stock | | 790,571
|
| 8
|
| 2,640
|
| | |
|
|
|
| (317)
|
| | | 2,331
|
| Balance at December 31, 2019 | | 146,819,401
| $
| 1,468
| $
| 1,169,537
| $
| -
| $ | (240,165)
| $
| 73
| $
| 1,531
| $
| 5
| $
| 932,449
|
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE PERIOD ENDED DECEMBER 31, 2019
Note 1 – General information
DHT Holdings, Inc. (“DHT” or the “Company”) is a company incorporated under the laws of the Marshall Islands whose shares are listed on the New York Stock Exchange. The Company’s principal executive office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The Company is engaged in the ownership and operation of a fleet of crude oil carriers.
The financial statements were approved by the Company’s Board of Directors (the “Board”) on February 5, 2020 and authorized for issue on February 5, 2020.
Note 2 – General accounting principles
The condensed consolidated interim financial statements do not include all information and disclosure required in the annual financial statements and should be read in conjunction with DHT’s audited consolidated financial statements included in its Annual Report on Form 20-F for 2018. The interim results are not necessarily indicative of the results for the entire year or for any future periods.
The interim condensed financial statements have been prepared in accordance with IAS 34 “Interim Financial Reporting” as issued by the International Accounting Standards Board (“IASB”).
The interim condensed financial statements have been prepared on a historical cost basis, except for derivative financial instruments that have been measured at fair value. The accounting policies that have been followed in these interim condensed financial statements are the same as presented in the 2018 audited consolidated financial statements.
These interim condensed consolidated financial statements have been prepared on a going concern basis.
Application of new and revised International Financial Reporting Standards (“IFRSs”)
New and revised IFRSs, and interpretations mandatory for the first time for the financial year beginning January 1, 2019 are listed below. With the exception of IFRS 16, the adoption did not have any effect on the financial statements:
| o | Amendments to IFRS 9 Prepayment Features with Negative Compensation |
| o | Amendments to IAS 28 Long-term Interests in Associates and Joint Ventures |
| o | Annual Improvements to IFRS Standards 2015-2017 Cycle, Amendments to IFRS 3 Business Combinations, IFRS 11Joint Arrangements, IAS 12 Income Taxes and IAS 23 Borrowing Costs |
| o | Amendments to IAS 19 Employee Benefits, Plan Amendments, Curtailments or Settlements |
| o | IFRS 10 Consolidated Financial Statements and IAS 28 (amendments), Sale or Contribution of Assets between an Investor and its Associate or Joint Venture |
| o | IFRIC 23 Uncertainty over Income Tax Treatments |
Adoption of IFRS 16 Leases
Effective from January 1, 2019, the Company adopted the new accounting standard IFRS 16 Leases using the modified retrospective method. The Company recognized an initial $1.5 million lease liability and a corresponding right-of-use lease asset to comply with the new lease standard. There was no transition effect on the opening balance of equity, and the comparative information has not been restated and continues to be reported under the accounting standards in effect for those periods. The effects of the change in the accounting standard from IAS 17 Leases to IFRS 16 Leases is described in further detail in DHT’s Annual Report on Form 20-F for 2018.
As of July 1, 2019, the Company recognized an increase of $1.6 million in the lease liability and a corresponding right-of-use lease asset related to a new contract that fall within the definition of a lease in accordance with IFRS 16.
As of December 5, 2019 the Company recognized an increase of $0.1 million in the lease liability and a corresponding right-of-use lease asset due to a modification of an existing lease.
Amounts recognized in the condensed consolidated statement of financial position as of December 31, 2019 after the adoption of IFRS 16 Leases, including additions in 2019, were as follows:
Amounts recognized in the consolidated statement of financial position
| |
| $ in thousands | December 31, 2019 |
Lease liability (Other non-current liabilities) | 2,241 |
Lease liability (Other current liabilities) | 605 |
Right-of-use asset (Other property, plant and equipment) | 2,808 |
Note 3 – Segment reporting
Since DHT’s business is limited to operating a fleet of crude oil tankers, management has organized the entity as one segment based upon the service provided. Consequently, the Company has one operating segment as defined in IFRS 8, Operating Segments.
As of December 31, 2019, the Company had 27 vessels in operation; 5 vessels were on time charters and 22 vessels operating in the spot market.
Information about major customers:
For the period from October 1, 2019 to December 31, 2019 five customers represented $28.5 million, $28.4 million, $25.8 million, $19.8 million and $11.8 million, respectively, of the Company’s revenues. The five customers in aggregate represented $114.3 million, equal to 60 percent of the total revenue of $191.8 million for the period from October 1, 2019 to December 31, 2019.
For 2019, five customers represented $84.1 million, $79.2 million, $73.6 million, $39.5 million and $34.8 million, respectively, of the Company’s revenues. The five customers in aggregate represented $311.2 million, equal to 58 percent of the total revenue of $535.1 million for the year ending December 31, 2019.
For the period from October 1, 2018 to December 31, 2018 five customers represented $33.9 million, $12.6 million, $10.6 million, $8.8 million and $8.6 million, respectively, of the Company’s revenues. The five customers in aggregate represented $74.5 million, equal to 54 percent of the total revenue of $138.6 million for the period from October 1, 2018 to December 31, 2018.
For 2018, five customers represented $76.0 million, $38.4 million, $19.3 million, $18.7 million and $18.7 million, respectively, of the Company’s revenues. The five customers in aggregate represented $171.1 million, equal to 46 percent of the total revenue of $375.9 million for the year ending December 31, 2018.
Note 4 – Interest bearing debt
As of December 31, 2019, DHT had interest bearing debt totaling $851.0 million (including the $125.0 million convertible senior notes).
Scheduled debt repayments (USD thousands) and margin above Libor
| | Margin | Q1
| Q2-Q4 | | | | |
| $ in thousands | above Libor | 2020 | 2020 | 2021 | 2022 | Thereafter | Total |
| ABN Amro Credit Facility | 2.40% | 8,344 | 25,033
| 33,378
| 33,378
| 336,128
| 436,261
|
| Credit Agricole Credit Facility | 2.19% | 1,649 | 4,948
| 6,597
| 6,597
| 36,328
| 56,120
|
| Danish Ship Finance Credit Facility | 2.25% | | 39,000
|
|
|
| 39,000
|
| Nordea Credit Facility* | 2.40% | 4,200 | 19,350
| 25,800
| 25,800
| 134,478
| 209,628
|
| ABN Amro Revolving Credit Facility** | 2.50% | |
|
|
|
|
|
| Convertible Senior Notes | | |
| 125,000
|
|
| 125,000
|
| Total | | 14,194 | 88,331
| 190,775
| 65,775
| 506,934
| 866,009
|
| Unamortized upfront fees bank loans | | |
|
|
|
| (6,606)
|
| Difference amortized cost/notional amount convertible note | | |
|
|
|
| (8,432)
|
| Total interest bearing debt | | |
|
|
|
| 850,972
|
*$46.7 mill. undrawn as of December 31, 2019.
**$47.6 mill. available as of December 31, 2019. Quarterly reduction of $1.3 million
ABN Amro Credit Facility
In April 2018 the Company entered into a credit facility with ABN Amro, Nordea, Credit Agricole, DNB, ING, Danish Ship Finance, SEB, DVB and Swedbank as lenders and DHT Holdings, Inc. as guarantor for the financing of eleven VLCCs and two newbuildings. Borrowings bear interest at a rate equal to Libor + 2.40% and the loan is repayable in quarterly installments of $8.3 million through Q2 2024 and a final payment of $286.1 with the last installment.
The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
| ● | Value adjusted* tangible net worth of $300 million |
| ● | Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets |
| ● | Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt |
* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).
Credit Agricole Credit Facility
In June 2015 Samco Gamma Ltd and DHT Tiger Limited entered into a credit agreement with Credit Agricole for the financing of the Samco Scandinavia and the newbuilding DHT Tiger that was delivered in January 2017. In June 2016 the Company made a voluntary prepayment of $5.0 million and the financing of the Samco Scandinavia is repayable with 30 quarterly installments of $0.97 million each. The $48.7million financing of DHT Tiger was drawn in 2016 in advance of the delivery of the DHT Tiger which took place in January 2017 and is repayable in quarterly installments of $0.7 million with a final payment of $29.7 in December 2023. The loan bears interest at Libor plus a margin of 2.1875%. The credit agreement is guaranteed by DHT and contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
| ● | Value adjusted* tangible net worth of $200 million |
| ● | Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets |
| ● | Unencumbered consolidated cash of at least the higher of (i) $20 million and (ii) 6% of our gross interest bearing debt |
* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).
Danish Ship Finance Credit Facility
In November 2014 the Company entered into a credit facility totaling $49.4 million with Danish Ship Finance (“DSF”) as lender and DHT Holdings, Inc. as guarantor for the financing of the VLCC newbuilding DHT Jaguar delivered in Q4 2015. The full amount of the credit facility was drawn in November 2015. Borrowings bear interest at a rate equal to Libor + 2.25% and are repayable in 10 semiannual installments of $1.3 million each from May 2016 to November 2020 and a final payment of $36.4 million in November 2020. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessel that secure the credit facility be no less than 130% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
| ● | Value adjusted* tangible net worth of $300 million |
| ● | Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets |
| ● | Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt |
* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).
Nordea Credit Facility
$204 million of the $300 million credit facility was borrowed during the second quarter of 2017 in connection with delivery of the nine VLCCs in water from BW. The final $96 million was borrowed in connection with the delivery of the two VLCC newbuildings from DSME in the second quarter of 2018. The credit facility is guaranteed by DHT Holdings, Inc., borrowings bear interest at a rate equal to Libor + 2.40%. In November 2019, the Company prepaid the outstanding amounts on DHT Lake and DHT Raven, totaling $22.3 million. Subsequent to the prepayment, the sale of the DHT Utah and DHT Utik and the delivery of DHT Stallion and DHT Colt in 2018, the current outstanding is repayable in quarterly installments of $4.2 million with a final payment of $119.3 million in the second quarter of 2023. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
| ● | Value adjusted* tangible net worth of $300 million |
| ● | Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets |
| ● | Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt |
* Value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).
In September 2018 the Company secured commitment to a $50 million scrubber financing structured through an increase of the existing $300 million secured credit facility entered into in the second quarter of 2017. The increased facility bear the same interest rate equal to Libor + 2.40%. In connection with the prepayment of DHT Lake and DHT Raven in November 2019, the facility was reduced to $45.0 million. As per December 31, 2019, a total of $31.5 million was drawn and $13.5 million is available. The facility will have quarterly installments of $2.25 million commencing second quarter 2020. Other terms and conditions remain unchanged.
ABN Amro Revolving Credit Facility
In November 2016, the Company entered into a secured five year revolving credit facility with ABN Amro totaling $50.0 million to be used for general corporate purposes, including security repurchases and the acquisition of ships. The financing bears interest at a rate equal to Libor + 2.50%. In April 2018, the Company entered into an agreement with ABN Amro to increase the revolving credit facility to $57.3 million with a quarterly reduction of $1.8 million starting July 31, 2018. In June 2019, the Company entered into an agreement with ABN to amend the repayment profile by reducing the quarterly reductions from $1.8 million to $1.3 million. Other terms and conditions remains the same. The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:
| ● | Value adjusted* tangible net worth of $300 million |
| ● | Value adjusted* tangible net worth shall be at least 25% of value adjusted total assets |
| ● | Unencumbered consolidated cash of at least the higher of (i) $30 million and (ii) 6% of our gross interest bearing debt |
Interest rate swaps
As of December 31, 2019, the Company has nine amortizing interest rate swaps totaling $379.9 million with maturity ranging from the second quarter 2023 to the third quarter 2023. The average fixed interest rate is 2.95%. As of December 31, 2019, the fair value of the derivative financial liability related to the swaps amounted to $15.6 million.
Covenant compliance
As of the date of the most recent compliance certificates submitted to the banks, the Company is in compliance with its financial covenants.
Note 5 – Vessels
The carrying values of the vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of constructing new vessels. Historically, both charter rates and vessel values have been cyclical. The carrying amounts of vessels held and used by us are reviewed for potential impairment or reversal of prior impairment charges whenever events or changes in circumstances indicate that the carrying amount of a particular vessel may not accurately reflect the recoverable amount of a particular vessel.
| Cost of Vessels | |
| $ in thousands | |
| At January 1, 2019 | 2,071,456 |
| Additions** | (1,139)
|
| Transferred from vessels upgrades | 39,795 |
Retirement ***
| (3,116) |
| At December 31, 2019 | 2,106,997 |
| | |
| Depreciation, impairment and amortization* | |
| $ in thousands | |
| At January 1, 2019 | 405,646
|
| Depreciation and amortization | 115,022
|
| Impairment charges | -
|
Retirement ***
| (3,116) |
| At December 31, 2019 | 517,553 |
| | |
| Carrying Amount | |
| $ in thousands | |
| At January 1, 2019 | 1,665,810 |
| At December 31, 2019 | 1,589,444
|
*Accumulated numbers
**Adjustments to capitalized expenses in 2018
***Relates to completed depreciation of drydocking for DHT Condor
Cost of vessel upgrades
| |
| $ in thousands | |
| At January 1, 2019 | -
|
| Additions | 51,446
|
| Transferred to vessels | (39,795)
|
| At December 31, 2019 | 11,652
|
| | |
| Carrying Amount | |
| $ in thousands | |
| At January 1, 2019 | -
|
| At December 31, 2019 | 11,652
|
Note 6 – Equity and Convertible Bond Offerings
Convertible Senior Note Offering
On September 16, 2014 the Company completed a private placement of $150 million aggregate principal amount of convertible senior notes due 2019 (the “2019 Notes”). DHT paid interest at a fixed rate of 4.5% per annum, payable semiannually in arrears. Net proceeds to DHT were approximately $145.9 million after the payment of placement agent fees. The value of the conversion right was estimated to $21.8 million; hence $21.8 million of the aggregate principal amount of $150.0 million was classified as equity. The Notes were convertible into common stock of DHT at any time after placement until one business day prior to their maturity. The initial conversion price was $8.125 per share of common stock (equivalent to 18,461,538 shares of common stock), and was subject to customary anti-dilution adjustments. On October 1, 2019 the Company announced that holders of $26,434,000 in aggregate principal amount of the Company’s 4.5% Convertible Senior Notes due October 1, 2019, exercised their right to convert their notes into shares at the conversion price of $6.0216 per share. As a result the Company issued 4,389,858 shares of common stock. The remaining $6,426,000 in aggregate principal amount was repaid in cash.
In August 2018 the Company completed a privately negotiated exchange agreement with certain holders of the outstanding 4.5% Convertible Senior Notes due 2019 to exchange approximately $73.0 million aggregate principal amount of the existing notes for approximately $80.3 million aggregate principal amount of the Company’s new 4.5% Convertible Senior Notes due 2021. In addition, a private placement was completed of approximately $44.7 million aggregate principal amount of the Company’s new 4.5% Convertible Senior Notes due 2021 for gross proceeds of approximately $41.6 million. Net proceeds to DHT were approximately $38.9 million after the payment of placement agent fees.
Following closing of the private exchange and the private placement, there are $125 million aggregate principal amount of convertible senior notes due 2021 (the “2021 Notes”) outstanding. The 2021 Notes will bear interest at a rate of 4.5% per annum on the principal amount accruing from August 21, 2018. Interest will be payable semiannually in arrears on February 15 and August 15 each year, beginning on February 2019. Interest is computed on the basis of 360-day year comprised of twelve 30-days months. The initial conversion price was $6.2599 per share of common stock (equivalent to 19,968,370 shares of common stock) and is subject to customary anti-dilution adjustments. As a result of the cumulative effect of previously announced cash dividends, the conversion price was adjusted to $5.9825 effective November 6, 2019. Based on the adjusted conversion price the total number of shares to be issued would be 20,894,108. The 2021 Notes will mature on August 15, 2021, unless earlier converted, redeemed or repurchased in accordance with their terms.
Note 7 – Stockholders equity and dividend payment
| | Common stock | Preferred stock |
| Issued at December 31, 2019 | 146,819,401 | -
|
Shares to be issued assuming conversion of convertible notes due 2021* | 31,141,489
| |
Numbers of shares authorized for issue at December 31, 2019 | 250,000,000 | 1,000,000 |
| Par value | $ 0.01 | $ 0.01 |
*assuming the maximum Fundamental Change conversion rate.
Common stock:
Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders.
Preferred stock:
In the first quarter 2017, the board established two series of preferred stock: Series C Preferred Stock and Series D Preferred Stock, the terms of which are detailed in Current Reports on Form 6-K dated January 30, 2017 and March 24, 2017, respectively. As of December 31, 2019, no shares of Series C Preferred Stock or Series D Preferred Stock were outstanding. Terms and rights of any other preferred shares will be established by the board when or if such shares would be issued.
Stock repurchase
The Company did not make any share repurchases during Q4 2019. In March 2019, the Company purchased 725,298 of its own shares in the open market for an aggregate consideration of $3.2 million, at an average price of $4.47 per share.
Dividend payment
Dividend payment as of December 31, 2019:
| Payment date | Total Payment | Per common share |
November 14, 2019
| $ | 7.3 million | $ | 0.05 |
| August 29, 2019 | $ | 2.8 million | $ | 0.02 |
May 28, 2019
| $
| 11.4 million
| $
| 0.08
|
| February 26, 2019 | $ | 7.1 million | $ | 0.05 |
| Total payment as per December 31, 2019 | $ | 28.7 million | $ | 0.20 |
| | | | | |
| Dividend payment as of December 31, 2018: | | | | |
| | | | | |
| Payment date | Total Payment | Per common share |
November 23, 2018
| $ | 2.9 million | $ | 0.02 |
| August 31, 2018 | $ | 2.9 million | $ | 0.02 |
| May 30, 2018 | $ | 2.9 million | $ | 0.02 |
| February 28, 2018 | $ | 2.9 million | $ | 0.02 |
| Total payment as per December 31, 2018 | $ | 11.5 million | $ | 0.08 |
Note 8 – Accounts receivable and accrued revenues
Accounts receivable and accrued revenues totaling $107.8 million as of December 31, 2019 consists of accounts receivable of $48.1 million with no material amounts overdue and accrued revenues of $59.7 million.
Note 9 - Financial risk management, objectives and policies
Note 9 in the 2018 annual report on Form 20-F provides for details of financial risk management objectives and policies.
The Company’s principal financial liability consists of long-term debt with the main purpose being to partly finance the Company’s assets and operations. The Company’s financial assets mainly comprise cash. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks.
