DHT Holdings, Inc. Third Quarter 2021 Results
HAMILTON, BERMUDA, November 2, 2021 – DHT Holdings, Inc. (NYSE:DHT) (“DHT” or the “Company”) today announced:
FINANCIAL HIGHLIGHTS:
| USD mill. (except per share) | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | 2020 | 2019 |
| Shipping revenues | 59.1 | 65.9 | 87.0 | 91.0 | 142.2 | 691.0 | 535.1 |
Adjusted net revenue1 | 37.7 | 45.3 | 71.3 | 77.7 | 117.5 | 550.5 | 347.6 |
Adjusted EBITDA2 | 14.0 | 21.0 | 46.7 | 51.1 | 92.9 | 450.4 | 254.5 |
| Net income/(loss) after tax | (21.0) | 0.8 | 11.6 | 7.63 | 50.73 | 266.33 | 73.7 |
| EPS – basic | (0.13) | 0.00 | 0.07 | 0.04 | 0.32 | 1.71 | 0.51 |
EPS – diluted4 | (0.13) | 0.00 | 0.07 | 0.04 | 0.31 | 1.61 | 0.51 |
Dividend5 | 0.02 | 0.02 | 0.04 | 0.05 | 0.20 | 1.08 | 0.47 |
| Interest bearing debt | 524.8 | 526.2 | 574.7 | 450.0 | 492.4 | 450.0 | 851.0 |
| Cash and cash equivalents | 64.5 | 52.2 | 54.0 | 68.6 | 75.1 | 68.6 | 67.4 |
| Net debt | 460.3 | 473.9 | 520.7 | 381.3 | 417.3 | 381.3 | 783.6 |
QUARTERLY HIGHLIGHTS:
| • | In the third quarter of 2021, the Company’s VLCCs achieved an average rate of $16,300 per day. |
| • | Adjusted EBITDA for the third quarter of 2021 was $14.0 million. Net loss for the quarter was $21.0 million which equates to a loss of $0.13 per basic share. The result includes a gain related to sale of vessels of $1.6 million and non-cash gains in fair value related to interest rate derivatives of $2.3 million. |
| • | For the first nine months of 2021, the Company’s VLCCs achieved an average rate of $22,400 per day and net loss was $8.6 million. |
| • | For the third quarter of 2021, the Company will return $10.1 million to shareholders; $6.7 million in the form of share buyback and $3.3 million in the form of a cash dividend. The Company acquired 1,230,302 of its own shares at an average price of $5.466 per share. |
| • | The cash dividend of $0.02 per share of outstanding common stock is payable on November 23, 2021 to shareholders of record as of November 16, 2021. This marks the 47th consecutive quarterly dividend. The shares will trade ex-dividend from November 15, 2021. |
| • | In connection with the sale of DHT Condor, the Company booked a gain of $1.6 million in the third quarter of 2021. DHT Condor was delivered to the new owner on July 8,2021. |
OPERATIONAL HIGHLIGHTS:
| | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | 2020 | 2019 |
Operating days6 | 2,399.5 | 2,513.4 | 2,471.6 | 2,484.0 | 2,484.0 | 9,882.0 | 9,855.0 |
| Scheduled off hire days | 84.8 | 99.8 | 231.9 | 180.0 | 20.6 | 255.5 | 352.6 |
| Unscheduled off hire days | 1.0 | 2.6 | 1.4 | 4.1 | 18.5 | 77.7 | 33.9 |
Revenue days7 | 2,306.2 | 2,325.3 | 2,238.3 | 2,299.9 | 2,444.9 | 9,548.8 | 9,468.5 |
Spot exposure8 | 55.7% | 48.5% | 38.2% | 39.3% | 60.8% | 63.5 % | 83.1 % |
| VLCC time charter rate per day | $ 27,600 | $28,200 | $39,400 | $41,700 | $53,000 | $50,400 | $38,400 |
| VLCC spot rate per day | $ 7,400 | $10,200 | $18,700 | $19,200 | $44,900 | $62,000 | $36,400 |
We continued to take advantage of the low freight market, as we did in the second quarter, bringing forward drydocking of vessels resulting in 85 scheduled off hire days for the quarter. This has been done with the view to have as many trading days as possible available for 2022, a year for which we are constructive on the outlook. Further, the cost of loss of income has been low during the weak freight market. When vessels come out of drydock, they are typically handicapped in the spot market for their first voyage and have to offer discounts, and possibly encounter waiting time, to commence trading. Hence, our spot earnings were negatively impacted during these periods.
Our business remains impacted by the Covid-19 virus outbreak with operational challenges related to our seafarers and our ability to change crews at regular intervals. There are still numerous restrictions affecting crew changes with strict transit and quarantine procedures and a limited number of geographical options to execute crew changes. We continue to do everything we reasonably can to facilitate safe and regular crew changes.
We note three key forces at play, in sum creating a constructive market outlook for our service. Firstly, oil consumption, and hence demand, is recovering post the virus outbreak, in particular as a consequence of increased mobility. Secondly, refiners have been consuming from oil inventories which again have been drawn down to levels targeted by leading oil producers. And thirdly, OPEC+ is gradually increasing supply of oil in response to the two preceding points, slowly increasing demand for transportation.
As of September 30, 2021, DHT had a fleet of 26 VLCCs, with a total dwt of 8,043,657. For more details on the fleet, please refer to the web site
: https://www.dhtankers.com/fleetlist/
SUBSEQUENT EVENT HIGHLIGHTS:
| • | On October 22, 2021, The Norwegian Shipowner’s Mutual War Risks Insurance Association (“DNK”) obtained approval from The Financial Supervisory Authority of Norway to return $300 million to its members. As a member of DNK, DHT expects to receive between $5.5 million and $6.5 million as distribution of equity within the first quarter of 2022. The distribution may be subject to withholding tax. |
OUTLOOK:
| • | Thus far in the fourth quarter of 2021, 70% of the available VLCC days have been booked at an average rate of $20,700 per day on a discharge-to-discharge basis (not including any potential profit splits on time charters). |
| • | The Company will continue to take advantage of the weak freight market to bring forward dry dockings and planned installations of scrubbers and ballast water treatment systems. Scheduled off hire is expected to be in the range between 100 and 125 days during the fourth quarter of 2021. |
Footnotes:
1Shipping revenues net of voyage expenses.
2 Shipping revenues net of voyage expenses, vessel operating expenses and general and administrative expenses. As showed in the table for reconciliation of non-GAAP measures.
3Q4 2020 includes impairment charge of $7.6 million. Q3 2020 includes impairment charge of $ 4.9 million. 2020 includes impairment charge of $12.6 million.
4Diluted shares include the dilutive effect of the convertible senior notes and restricted shares granted to management and members of the board of directors.
5Per common share.
6Operating days are the aggregate number of calendar days in the period in which the vessels are owned by the Company or chartered by the Company.
7Revenue days are the aggregate number of calendar days in the period in which the vessels are owned by the Company or chartered by the Company less days on which a vessel is off hire.
8 As % of total operating days in period.
THIRD QUARTER 2021 FINANCIALS
The Company reported shipping revenues for the third quarter of 2021 of $59.1 million compared to shipping revenues of $142.2 million in the third quarter of 2020. The decrease from the 2020 period to the 2021 period includes $75.0 million attributable to lower tanker rates and $8.1 million attributable to a decrease in total revenue days as a result of scheduled off hire in connection with special surveys and scrubber installations. The Company took advantage of the weak freight market to bring forward dry dockings and planned installations of scrubbers and ballast water treatment systems.
Voyage expenses for the third quarter of 2021 were $21.4 million, compared to voyage expenses of $24.7 million in the third quarter of 2020. The decrease was due to fewer revenue days in the spot market representing a $2.0 million decrease in port cost and a $0.8 million decrease in broker commission.
Vessel operating expenses for the third quarter of 2021 were $19.2 million compared to $20.5 million in the third quarter of 2020.
Depreciation and amortization, including depreciation of capitalized survey expenses, was $31.7 million for the third quarter of 2021, compared to $31.1 million in the third quarter of 2020. The increase was due to increased depreciation related to scrubbers of $1.3 million, partially offset by a decrease in depreciation related to vessels of 0.7 million.
No impairment charge was recorded in the third quarter of 2021. A non-cash impairment charge of $4.9 million was recorded in the third quarter of 2020 due to a decline in values for second-hand tankers.
The Company recorded a gain of $1.6 million for the third quarter of 2021 related to the sale of DHT Condor.
General and administrative expense (“G&A”) for the third quarter of 2021 was $4.4 million, consisting of $3.6 million cash and $0.8 million non-cash charge, compared to $4.1 million in the third quarter of 2020, consisting of $3.1 million cash and $1.0 million non-cash charge. Non-cash G&A includes accrual for social security tax.
Net financial expenses for the third quarter of 2021 were $4.7 million compared to $6.1 million in the third quarter of 2020. The decrease was mainly due a $2.5 million decrease in interest expenses due to reduced outstanding debt and a reduction in 3-Month Libor in the third quarter of 2021, partially offset by a $0.8 million increase in other financial expense.
As a result of the foregoing, the Company had a net loss in the third quarter of 2021 of $21.0 million, or a loss of $0.13 per basic share and $0.13 per diluted share, compared to net income in the third quarter of 2020 of $50.7 million, or an income of $0.32 per basic share and $0.31 per diluted share. The decrease from the 2020 period to the 2021 period was mainly due to lower tanker rates.
Net cash used in operating activities for the third quarter of 2021 was $3.1 million compared to net cash provided by operating activities of $131.3 million for the third quarter of 2020. The decrease was due to a net loss of $21.0 million in the third quarter of 2021 compared to net income of $50.7 million in the third quarter of 2020, a $56.3 million decrease in changes in operating assets and liabilities and a $6.4 million decrease in non-cash items included in net income.
Net cash provided by investing activities was $27.6 million in the third quarter of 2021 comprising $29.6 million related to the sale of DHT Condor, partially offset by $1.9 million related to investment in vessels. Net cash used in investing activities was $3.4 million in the third quarter of 2020 and was mainly related to investment in vessels.
Net cash used in financing activities for the third quarter of 2021 was $12.3 million comprising $6.7 million related to purchase of treasury shares, $3.3 million related to cash dividend paid, and $1.9 million related to scheduled repayment of long-term debt. Net cash used in financing activities for the third quarter of 2020 was $190.5 million comprising $149.7 million related to prepayment of long-term debt, $82.0 million related to cash dividend paid and $16.4 million related to scheduled repayment of long-term debt, partially offset by $57.8 million related to issuance of long-term debt.
As of September 30, 2021, the cash balance was $64.5 million, compared to $68.6 million as of December 31, 2020.
The Company monitors its covenant compliance on an ongoing basis. As of September 30, 2021, the Company was in compliance with its financial covenants.
As of September 30, 2021, the Company had 166,687,881 shares of common stock outstanding compared to 170,798,328 shares as of December 31, 2020.
The Company declared a cash dividend of $0.02 per common share for the third quarter of 2021 payable on November 23, 2021 for shareholders of record as of November 16, 2021.
NINE MONTHS 2021 FINANCIALS
The Company reported shipping revenues for the first three quarters of 2021 of $212.0 million compared to $600.0 million in the first three quarters of 2020. The decrease from the 2020 period to the 2021 period includes $356.6 million attributable to lower tanker rates and $31.4 million attributable to a decrease in total revenue days as a result of scheduled off hire in connection with special surveys and scrubber installations.
Voyage expenses for the first three quarters of 2021 were $57.8 million compared to voyage expenses of $127.3 million in the first three quarters of 2020. The decrease was due to fewer vessels in the spot market representing a $53.3 million decrease in bunker expenses, a $10.2 million decrease in port expenses and a $4.5 million decrease in broker commission.
Vessel operating expenses for the first three quarters of 2021 were $57.9 million, compared to $60.0 million in the first three quarters of 2020. The decrease was mainly related to up-storing of spares and consumables in 2020 in relation to IMO2020.
Depreciation and amortization, including depreciation of capitalized survey expenses, was $95.9 million for the first three quarters of 2021, compared to $92.2 million in the first three quarters of 2020. The increase was mainly due to increased depreciation related to scrubbers of $3.6 million.
No impairment charge was recorded in the first three quarters of 2021. A non-cash impairment charge of $4.9 million was recorded in the first three quarters of 2020 due to a decline in values for second-hand tankers.
The Company recorded a gain of $15.2 million for the first three quarters of 2021 related to the sale of DHT Raven, DHT Lake, and DHT Condor.
G&A for the first three quarters of 2021 was $14.6 million, consisting of $11.0 million cash and $3.6 million non-cash charge, compared to $13.4 million, consisting of $9.6 million cash and $3.8 million non-cash charge for the first three quarters of 2020.
Net financial expenses for the first three quarters of 2021 were $9.3 million, compared to $42.8 million in the first three quarters of 2020. The decrease was due to a non-cash gain of $8.0 million related to interest rate derivatives in the first
three quarters of 2021 compared to a non-cash loss of $10.5 million in the first
three quarters of 2020 and $12.7 million decrease in interest expenses due to reduced outstanding debt and a reduction in 3-Month Libor in 2021.
For the first three quarters of 2021, the Company had a net loss of $8.6 million, or a loss of $0.05 per basic share and $0.05 per diluted share compared to net income of $258.7 million, or income of $1.72 per basic share and $1.56 per diluted share in the first three quarters of 2020. The difference between the two periods mainly reflects lower tanker rates in 2021.
Net cash provided by operating activities for the first three quarters of 2021 was $41.7 million compared to $448.5 million for the first three quarters of 2020. The decrease was due to a net loss of $8.6 million in the first three quarters of 2021 compared to net income of $258.7 million in the first three quarters of 2020, a $97.9 million decrease in changes in operating assets and liabilities and a $41.7 million decrease in non-cash items included in net income.
Net cash used in investing activities for the first three quarters of 2021 was $73.4 million comprising $160.4 million related to investment in vessels, partially offset by $87.1 million related to sale of vessels. Net cash used in investing activities for the first three quarters of 2020 was $16.2 million comprising $15.8 million related to investment in vessels and $0.4 million related to investment in property, plant and equipment.
Net cash provided by financing activities for the first three quarters of 2021 was $27.6 million comprising $355.8 million related to issuance of long-term debt, partially offset by $175.9 million related to repayment of long-term debt in connection with refinancing, $93.4 million related to prepayment of long-term debt, $29.2 million related to purchase of treasury shares, $18.7 million related to cash dividends paid, $6.1 million related to repayment of long-term debt in connection with sale of DHT Condor and $4.5 million related to scheduled repayment of long-term debt. Net cash used in financing activities for the first three quarters of 2020 was $424.6 million comprising $266.6 million related to prepayment of long-term debt, $180.5 million related to cash dividends paid, $48.4 million related to scheduled repayment of long-term debt, partially offset by $71.3 million related to issuance of long-term debt.
As of September 30, 2021, the cash balance was $64.5 million, compared to $68.6 million as of December 31, 2020.
As of September 30, 2021, the Company had 166,687,881 shares of our common stock outstanding compared to 170,798,328 as of December 31, 2020.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
The Company assesses the financial performance of its business using a variety of measures. Certain of these measures are termed “non-GAAP measures” because they exclude amounts that are included in, or include amounts that are excluded from, the most directly comparable measure calculated and presented in accordance with IFRS, or are calculated using financial measures that are not calculated in accordance with IFRS. These non-GAAP measures include “Adjusted Net Revenue”, “Adjusted EBITDA” and “Adjusted spot time charter equivalent per day”. The Company believes that these non-GAAP measures provide useful supplemental information for its investors and, when considered together with the Company’s IFRS financial measures and the reconciliation to the most directly comparable IFRS financial measure, provide a more complete understanding of the factors and trends affecting the Company’s operations. In addition, DHT’s management measures the financial performance of the Company, in part, by using these non-GAAP measures, along with other performance metrics. The Company does not regard these non-GAAP measures as a substitute for, or as superior to, the equivalent measures calculated and presented in accordance with IFRS. Additionally, these non-GAAP measures may not be comparable to other similarly titled measures used by other companies and should not be considered in isolation or as a substitute for analysis of the Company’s operating results as reported under IFRS.
| USD in thousands except time charter equivalent per day | Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | 2020 | 2019 |
| Reconciliation of adjusted net revenue | | | | | | | |
| Shipping revenues | 59,095 | 65,940 | 86,983 | 90,992 | 142,196 | 691,039 | 535,068 |
| Voyage expenses | (21,443) | (20,689) | (15,705) | (13,268) | (24,691) | (140,564) | (187,500) |
| Adjusted net revenue | 37,652 | 45,251 | 71,278 | 77,724 | 117,506 | 550,475 | 347,568 |
| | | | | | | | |
| Reconciliation of adjusted EBITDA | | | | | | | |
| Net income/(loss) after tax | (21,032) | 808 | 11,611 | 7,627 | 50,672 | 266,281 | 73,680 |
| Income tax expense | 97 | (26) | 160 | 196 | 127 | 900 | 131 |
| Other financial (income)/expenses | 1,015 | (2,805) | 644 | 81 | 181 | 1,334 | 1,790 |
| Fair value (gain)/loss on derivative financial liabilities | (2,316) | (2,247) | (3,430) | (2,403) | (2,611) | 8,074 | 9,863 |
| Interest expense | 6,348 | 7,049 | 6,033 | 6,296 | 8,863 | 38,408 | 55,332 |
| Interest income | (4) | (0) | (1) | (12) | (3) | (212) | (1,077) |
| Share of profit from associated companies | (293) | (346) | (344) | (344) | (340) | (1,193) | (852) |
| (Gain)/loss, sale of vessel | (1,556) | (13,597) | - | - | - | - | - |
| Impairment charges | - | - | - | 7,640 | 4,920 | 12,560 | - |
| Depreciation and amortization | 31,734 | 32,160 | 31,995 | 32,028 | 31,117 | 124,245 | 115,584 |
| Adjusted EBITDA | 13,993 | 20,995 | 46,668 | 51,108 | 92,926 | 450,397 | 254,452 |
| | | | | | | | |
| Reconciliation of adjusted spot time charter equivalent per day* | | | | | | | |
| Spot time charter equivalent per day | 7,400 | 10,200 | 18,700 | 19,200 | 44,900 | 62,000 | |
| IFRS 15 impact on spot time charter equivalent per day** | 3,000 | (600) | (1,400) | 1,300 | (4,200) | (2,600) | |
| Adjusted spot time charter equivalent per day | 10,300 | 9,600 | 17,300 | 20,500 | 40,600 | 59,400 | |
* Per revenue days. Revenue days are the aggregate number of calendar days in the period in which the vessels are owned by the Company or chartered by the Company less days on which a vessel is off hire.
** For vessels operating on spot charters, voyage revenues are calculated on a discharge-to-discharge basis. Under IFRS 15, spot charter voyage revenues are calculated on a load-to-discharge basis. IFRS 15 impact refers to the timing difference between discharge-to-discharge and load-to-discharge basis.
EARNINGS CONFERENCE CALL AND WEBCAST INFORMATION
The Company will host a conference call and webcast which will include a slide presentation at 9:00 a.m. EST/14:00 CET on Wednesday November 3, 2021 to discuss the results for the quarter.
All shareholders and other interested parties are invited to join the conference call, which may be accessed by calling +1 646 741 3167 within the United States, +47 21 56 30 15 within Norway and +44 (0) 207 192 8338 for international callers. The passcode is “4193115”.
The webcast, which will include a slide presentation, will be available on the following link:
https://edge.media-server.com/mmc/p/inshzaqn and can also be accessed in the Investor Relations section on DHT’s website at http://www.dhtankers.com.
An audio replay of the conference call will be available until November 10, 2021 at 19:00 CET. To access the replay, dial +1 917 677 7532 within the United States, +47 21 03 42 35 within Norway or +44 (0) 333 300 9785 for international callers and enter “4193115” as the confirmation code.
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, Singapore and Norway. 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 http://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, in particular regarding dividends (including our dividend plans, timing and the amount and growth of any dividends), daily charter rates, vessel utilization, the future number of newbuilding deliveries, oil prices and seasonal fluctuations in vessel supply and demand. 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 Securities and Exchange Commission on March 25, 2021.
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
Wilhelm Flinder, Manager, Investor Relations & Business Analysis
Phone: +1 441 295 1422 and +47 936 11 350
E-mail: wf@dhtankers.com
DHT HOLDINGS, INC.
UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF SEPTEMBER 30, 2021
