DHT - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to the Fourth Quarter 2021 DHT Holdings Earnings Conference Call. At this time all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please be advised that today's conference is being recorded. today, Co-CEOs, us and Moxnes With P. Trygve Instructions] we Svein have Harfjeld [Operator Laila Halvorsen. CFO, and Munthe; I'd to speaker today, now your Laila to like Halvorsen. turn the over conference first Please go ahead.

Laila Halvorsen

thank and XXXX quarter call. and I'm Co-CEOs, everyone. Good Trygve Holdings DHT's earnings good by Moxnes you. joining DHT morning Welcome Thank and Svein you joined Munthe. for fourth afternoon Harfjeld

our link As website, be up for open highlights before usual, we can we will deck questions. dhtankers.com. go to The through found slide financials on and some the your

we remarks. this I at the will Before February with like would call, available until get today's A started XXth. to make our be conference following website, dhtankers.com, of replay call

an be In on SEC and our exhibit addition, Form website as the to X-K. earnings our our release will available on system press EDGAR

per economic the utilization, these statements. scrapping, oil schedules. periodic our and of We sheet our At the results drydock factors the these regarding about on reminder, values. you that continues including and current world which $XX.X million, materially buildings repayments; at availability risks quarter website and $XXX.X forward-looking debt based statements with patterns, are a based $XXX daily to call discuss activity, DHT of we and EDGAR As this information cash. in strong total market expectations prospects, in under are ships events, vessel XX% more and was charter trading repurchases projected Financial prices company's and and well for was DHT's on is differ leverage million conference may below to of read and on $XX.X reports Actual scrap as expectations anticipated is dividends, levels we These high facilities for the reflected general; and quarter at will balance forecasts debt the about forward-looking from rates both values net nature. a end, market oil ended end, the matters on including of healthy outlook in vessel SEC future the quarter million million the in new system, tanker current face. on our urge December XXst. for credit liquidity risk that forward-looking reports revolving share putting available show

quarter with was equal was to $X.X to G&A for fair $X,XXX ship/day. The Looking the quarter company in at $XX of came We and ship. per low and includes G&A good distribution million for to Average of loss million, at the $X,XXX million, gain the for current a $XX.X to believe P&L OpEx non-cash The quarter million. equal was cost the the OpEx this $X.X the in million. $XX.X highlights. show per related the to million. EBITDA at interest accruals the performance very year which rate a for a was due full of fourth for very XXXX day per continues reversal derivatives was to control a is cash result equity of value $X.X net given tanker Risk War competitive from market. related club million results compensation. Mutual $X.X

per related for results. with revert average the an will to of for in day our average year the quarter quarter the guidance achieved $XX,XXX full day. to of with connection TCE TCE company while XXXX G&A amounted We the XXXX first XXXX, In $XX,XXX per fourth of

$XX,XXX an average been For rate have of booked per quarter available day. day. been the of average at days an booked first have of per of XX% XXXX, days the available of rate $XX,XXX XX% spot at

buybacks $X.X million, repayment the cash million debt in shareholders and and cash amounted capital we million mainly charter of to $X.X allocated CapEx. of working cash. generated we Changes the and for in quarter with vessels through used Let's go and was on EBITDA. ended scrubber while We to with million, the million $XX.X time payment. was resulting $X.X and million million Ordinary quarter from started through $XX $XX.X bridge. cash to amounted maintenance dividend the $XX.X redelivery share interest of

call As despite freight note Svein. that, and will challenging will our the operations turn again With I cash you very were market, positive. to the over

Svein Moxnes Harfjeld

one not The the slide core but the and Laila. this just the will one out of company which topic, very running margin will illustrates through company, EBITDA entrusted. through or the is Thank how is you we single am On past quarter ship as issue This to been discuss years. capital, this a five best has a much you, delivers operationally owning a a year, I agree sure slide, illustrated time. over over gets

the three space. We public the relevant to have compare taken liberty margin with our in the peers most

this coincidence best see, no maybe reflects culture. As some easy will every think company by period, this in you of over the bars but people the comes by either. fleets top within feat, ESG year green nonsense out the our of no this quality industry no on team run represented a We our

Another is how our allocate we strategy in capital. feature consistent

Firstly, and row. cash we will including paid this dividends a XX have for quarters quarter, reporting quarterly in

ago. remained allocation years Secondly, has policy was our capital unchanged seven introduced and

dividend net is excluding to We calculating ordinary formula negative including capital positive non-cash of our in minimum keep our the income. a gains of investors adjustments mind XX% have given and the of benefit and it

quarter, total $X.X For of the shareholders. will a we to fourth million return

receipts. announced, retired previously own shares XXX,XXX shares have we our As at of of price bought back average were an The we upon $X.XX.

we will to be XXth February record the payable addition share buybacks, will shareholders of to per It February. the on quarter. on pay the for $X.XX of the dividend of XXth of In a cash share

dividend. mentioned, consecutive marks As XXth our this quarterly cash

million time to $XX currently $XX,XXX offers ships this For half, during have in million first and buybacks. in our profit XXXX whole, to equal of average XXXX charters dividends for year. on day, during on be is sharing, time about time charter excluding which We per of the portfolio. $XX shareholders, cover four The an share of as the This six for half. consisting down returning a XX% any. is cash we'll will million these second moving $XX if slide about X% to update rate The expire charter,

pursuing Trygve. are charters We turn with time, and actively could of the to other current I with extensions additional in acceptable. and of charters for being our time rates the relation not And possible that terms last over to the time in course, to markets. exceptions call customers, will subject, There current be

Trygve P. Munthe

Thank you, Svein.

protecting without giving update on downside away with now stand us strategy upside. respect the we you where Let of to our the

in at want that in this DHT to only first. our we number Let's $XX,XXX breakeven cash remember cash The generate ships be look to from neutral. for per day spot you to order slide XXXX need is

You you should more inform recognize are our that market, as current this. we this than making can in and a a spot dreadful sharp competitive number. even very And ships

As days $XX,XXX Laila day. XX% at of a to over at available said, first quarter date spot booked bookings stand

we to have protected if generate cash this that So very state you you well. in dare downside market, you

us which charters, year. ships We have the six expire switch of will currently Let to upside. within four in time then the

immediate participation As DHT operational leverage the once finally see, happens. you can great and recovery market offers

$X.XX million a see generate which average we in were equates spot cash to share. the example, we per flow, stand for rates day free year, $XX,XXX to an if $XXX As to

spot a change a in that You cash to should quarter almost some $XX also $X,XXX note equaled day a in flow, annual million equivalent rates a share.

Two, limited Finally, in group. of sheet we to over we whilst having $XX.X summarize this has worst profitable in balance market not loss the the the a peer let the strongest million in XXXX, proud key the tanker us messages in DHT presentation. One, were in generation. are

of immediate number exceeded have on XX% compare DHT we share so consistently the to total margin five, VLCCs policy. And very favorably we of others market, million are the cash have we $XX cash Four, a Although combination recovers. minimum a $XX,XXX allocation In yet capital just buybacks. dividends day, spot XXXX, flow with when even a superior now returned compared this market once XX a the giving of in participation to certainly we just was continue generate will in in deliver we our Three, to of believe market one and cash positive the spot today's peers. EBITDA reported far, peers. breakeven

up open a desire announced questions, was your let of up doing ago. that a just couple financial build it that to add was retirement with my we about me a what Svein for was VLCC the of the was Before and have investing sheet comments are disciplined all and small also great ship-owning after a When building sizable provider crisis some to I'm XXXX, weeks team brief we tonnage of company the DHT the decided staying business we highly right countercyclically, today. proud the regarded to cycles. suitable and been owner able transform for namely, and how through our platform became things, very to a balance I

have with small team, whom with older shape a it dedicated great it and strong just both shipping We professionals balance and ashore talented sheet happened. done in without group excellent together company couldn't and of a The is ships. have a the fleet, terrific

do the very I'm the good accomplished to the It like question to really what that. coming skillfully want and to retire market that is Svein all us this? pursue DHT here. of reason right. in while to future I'm as things years wanted colleagues my from DHT strong. hobbies ago, for I thank and I'd So able have the some and the always is all stop feel proud team to of tanker and my cycles. Svein would shift what and great become, convinced A and a it continue that the DHT time been through things I've world wonderful I'm enjoy many XX It at in totally the DHT. out confident has indeed, and doesn't holds still down the to navigate set step will but and do has for young great be as I journey, simple the right why I to simple

Operator? So line [Operator with your of Randy Instructions] from questions. Giveans take that, comes the first your we Please Our to are ask now questions. from you. ready question Jefferies. Thank

Randy Giveans

you team are How going? it DHT? is How

Svein Moxnes Harfjeld

Doing are well. Thanks. How you?

Randy Giveans

first doing question, just return. I'm I at right. all guess, capital looking well,

a minimum XX-XX and of about number a that goal is of million Is maximum buy the during the the that of buybacks, You terms you shares fourth roughly could purchases $X.X you know was now of did terms split XX-XX kind determined? just split? in amount for of $X.XX Or dividend. between dividend share how I that period? stock have the in quarter, that

Trygve P. Munthe

been of part the it's really Randy, a capital number of the of policy. not I a but minimum for has think, allocation first all, $X.XX that years,

allocated to quite capital. committed has So approach while. good order into of then sure. writing, a from some opportunistic course, this an way for I but did us your that And have ships. been done that say we The ran potential did in on just years. know, invest to at year, we have year practice depressed other be is back wanted look always than off to price-wise buying last But for and know, a of on And we at not certain And market we dividends we uses away all second we more course, it's in been this to question that the buybacks, something look eco owned some cash scrubber-fitted of bit and company we see capital after has and prices to as last And the whatnot, done cash flow the And preference we've for on occasions that. we’ve and of a you over particularly shares it been when you instead. only we as buybacks. on the share going to modern

going the to any of to in on is but one certainly future, allocate we're it guidance So it's very firm to. capital give the what alternatives hard do to

Randy Giveans

to use for see say I are count rates question mentioned me low That above just the rates fair. That's spot going are terms XX,XXX It's Brokers said, down right? guess level. you negative, and great share general day. your but in Okay. market, up, going there. to good the continue plus still a of per still second so your NAV relatively

on on levels at demand higher? OPEC lows. And to increasing rise, inventory with a rates? an tight see eight-year gradually what such do supply, when lid keeping you expect So is inflection maybe the

Svein Moxnes Harfjeld

in recognize just the we short-term things ahead. I market. there's right The tanker ships mentioned, in many think all these and in the will is the it Randy, that a favor way too in you strong be market, of And moving things the is short oil eventually, answer market.

So And hardly from demand you a have of scrapping ships. one, most you have retirement a secondly, big barrels. of fleet any or transportation had sort satisfying sanctioned for

ships XX to, we're And or of XX docks years, older of far all XX% systems, I XX now dry are year XX% than are will through some scrap between water be this XX. treatment older and been XX% There close and from So et the XX%, think, fleet cetera, these and years. turning installed have fleet ships prices ballast we than the high.

is I logics here So you to at to And think the the ships really many is short-term leads all in too of some have scrapping that sort point. pain there will start market. that's

Randy Giveans

stay enjoy and on simple young again. strong. Yes. thanks All fair, life That's and next retirement Trygve, Congrats supply/demand. of good, well, the stage

Trygve P. Munthe

Thanks, Randy. it. I appreciate

Randy Giveans

stay well. Alright,

Operator

Thank you.

your Please Research. Your next from question. comes question Webber from Tsung Chris ask

Chris Tsung

afternoon Hi, are everyone. good you? How

Svein Moxnes Harfjeld

Good, thanks.

Svein Moxnes Harfjeld

dry XXXX. the there docking, think about ask scheduled to wanted three I in was Just

call, guys On QX. the half and the in believe first there in I said two last one you was

any given is slide is you Or the potentially to market there expecting line? this to going do in now? Just Is able update? be to where stay forward

Svein Moxnes Harfjeld

We've also no other the set got we two communicated and date as class. chances to can, dock required speak, in the is as but we as the to yet. are one possibly we But try what there's will is schedule bring forward according dry

Chris Tsung

to-date, Thanks. rates what booked the confirm fixtures Okay. spot for so you the can And QX far? is

Svein Moxnes Harfjeld

Yes.

for Laila the first it's As said, quarter. XX,XXX

Chris Tsung

for it Trygve. congrats That's And Okay. retirement on me.

Trygve P. Munthe

you. Thank

Operator

Thank you.

Omar Our next your from comes Clarksons ask from question Platou[ph]. Nokta question. Please

Omar Nokta

very market and wishing in and from timing-wise? have XXXX, you this at which past a DHT agreeing so. I the morning of leaving debt also you kind guys with your And pay really bit Trygve year, of months you afternoon. us saying good those XX with Wanted kind resources. much do And something But you a considering retirement. to happy Clarksons have cash a in schedule, of is, it's your guys, think Hi we've are terms the of also comments, What maturities. you're to I ask great you. XXXX doable or existing about Thank shape, clearly, been in more maybe think, good couple not and thinking refinancing in the

Trygve P. Munthe

sort have re-financings of doesn't historically, facility time short-term as addressed I we think the expiring debt. show in so that up

quite value I more frankly, at it speaking. generally see think we good have, be any that. So able with to we'd year do to we typically, like – the a loan to there's out, not issues all refinance like something the attractive contrary, chance a that at And company do terms, to the potential that is going to

Omar Nokta

East And to been of target. I West their meeting real Thank a And just less OPEC+ to think the bit brought barrels, more maybe to of and real and Africa some of their Randy the sort Okay. some Middle week, was I inability that. or the hit especially the you. coming targets. on up struggling Last just points of to so the seems quotas basically OPEC one of on then the had guess out big meet discussion just of, the have out producers, maybe of shifting

on you that? terms color trading of are is And In of there a are to then Africa returning any you give improving for as of indication out patterns, that amount can of Any sort of some result seeing and West cargoes? things normalized what VLCCs this?

Svein Moxnes Harfjeld

are Angola[ph] the other West the not in you're such on change, OpEx. country one think room one of up. system this obviously to I been being in the Nigeria disappointing Maybe not sort so particular, as countries is right OPEC country that has elephant permitted this in delivering works with Africa will to point the quota, if and step and

So up will any certainly West will can't we've decide to that guess seen producers up. indication somebody be that or say up good market stepping I and which time, is could business But have maybe an shale will cash they the these where there increasing, in going market. leads the use is step counts make that for sort what is will of prices be is Africa certainly tanker in I seen we've they and the with tight. that flows the in the so production rig well are, that

space So come there for power to out. be those should

So positive market. certainly that freight will the be for

Omar Nokta

And Yes. question then final one you. maybe just Svein. Thanks for

lot a Anything lands market, ships seeing? or been you sale have discussion Just how coming been year. cash a point? year, – looking of talk buyers been and can tanker Is think give the from S&P of your from the you're market on start both any there's can is market. into still lot the today that purchase the the early, earlier about and the space, secondhand crude there's the in give but there guess, still we're vantage I you product at of I and looking something insight in your at

Svein Moxnes Harfjeld

I a fleet. We that love quite the a keep if would these ships last some half say, older activity, KYC, you word. was There regarded would of with in that as took selling at year, so-called of in think transact first mind are in bit we they three our the it's advantage which will also like, lot buyers older not end, buyers least to we I of more quiet. cash the be

bit then it more And doing refrain trade. have growing seems that to not from business. a in trade is you this quiet market and just it's so But that a illicit

this in would sanctions market. surprised their this that future, discussed distant more too see to anything, we If and maybe expand not to will service be of to sort change. diving into So people fleet being are

I in standoff. happened the There potential bit which in I it's above here, quite past see very bit a some also six – where modern prices, are. asking and are been maybe are transactions. a buyers a anything sellers almost months, there's the think probably So of few

So the Where values. very hands more again, activity seen you at in or of broken it's the or have assets and XX-, some XX-year as have changed quiet. of spectrum old sort late less

Omar Nokta

Got it. happy the and I appreciate retirement. comments Trygve,

Trygve P. Munthe

very Thank you much.

Operator

you. Thank

from Our Wainwright. next from go Fyhr Please Magnus H.C. comes ahead. question

Magnus Fyhr

good the hobbies. Yes, challenging time to hope all despite I quarter retirement, happy hi. to to you find on Congratulations a market. your do Also Trygve wanted congratulate

there the summer to production First, you about all their reach year? seasonal curious, follow question a of guys on different what offset do reallocation see Omar's guess pretty I OPEC. this think you – potentially or drivers recovery. the be to some you that any the the mentioned want see talked just within could We on other a OPEC guys weakness. out to recovery quotas already struggling you if But there's have But crystal here the market I of quotas. could just market playing since good ball that about up

Trygve P. Munthe

it months. of sort over argue I seen seasonalities seasonality. at feel think we've older a least a normal few market the much already, you huge strong hinges discussed this of is also, And as certainly retiring the to come normal going stronger break summer sort pent-up than in ships. next a case potential additional to you winter the We of there. how the to that feel, market in And we hasn't And production is can much you winter. what will there terms so see that of upon going the when dam is any saw

having flipside would a again, could where in case well a market and argue seasonality thereby or year see a of the XXXX. see you strong very So you summer very

Magnus Fyhr

I in good item. All some forward? Was rate social going of And I fourth color. quarter? quarter. for anything significantly there's one in there the fourth security accruals right. guess, the was particular mention what's housekeeping run a dropped And that Good. Thanks just some there for there. guess G&A

Trygve P. Munthe

May lower it light It year. And the on dramatically. through call, is year. bonuses G&A, earlier we quarter, quarter guidance the we earnings get social was back would like certainly the – the And in mentioned cut were first reversal the like next in I future back security, for the main was on for accrue year, for wasn't call of but the the accruals. in to or loss-making for Svein bonuses back there reason as to And this the of would come G&A

Magnus Fyhr

Okay. Very happy retirement. good. you Well, thank and

Trygve P. Munthe

again, Thanks Magnus.

Operator

you. Thank

Jon question. from Please from Our next Evercore. your question ask comes Chappell

Jon Chappell

the any Or recovery relates you you. years, now Thank kind about revisit discussed just things financial? are Board think cycle, yet. we've the is whatsoever one fleet, the changes for of Good the Svein, the goes me, also Only and market it point. that segments and steady all the of and fleet, the either the big picture. of of hasn't to as And flying you of solo addressed where afternoon. of employment different as couple next kind why have Trygve's left improved at we growth in the the or will kind strategy in retirement, as she until it with

Svein Moxnes Harfjeld

It's a answer. That's the method. short

Trygve P. Munthe

Okay. Thanks, Jon.

Jon Chappell

Short question. short Okay. answer, Thanks.

Trygve P. Munthe

Okay. Thanks, Jon.

Operator

Silvera Please Instructions] ahead. go [Operator Silvera. you. comes from question Our Thank Robert next from

Robert Silvera

Hello.

Svein Moxnes Harfjeld

Yes, sorry. Please go ahead.

Robert Silvera

Yes. Robert Silvera.

to Okay. done of a make your it XX,XXX first cash a such I that up you, give tremendous in longer did rates, you to around of if current a earlier which, period you at much a to will up it XXXX. turn be you went rates setting for would all, can able effect, in and endure save job you future for wonderful longer that as a so have and the presentation want fast the flow referred to, period day, to business as advantage that as in money once and in thank

then of in rapid you to the has for so back go well will that, given which paid Now that debt, you reduction past.

Svein Moxnes Harfjeld

flows as As we our like strong. rightly you permit, our And noted, cash to said, invest today balance sheet sheet. is also balance very in when

In strongest all peers. the fact, the it's amongst

is to a no offer there the we the flexibility – do this, think it's balance having will stronger potentially through more sheet. urgency much but company even by it So sort of cycles

will or flows shareholders, will when balance – cards continue definitely the to in invest cash be that on the in we that sheet. rewarding permit in So to addition

Robert Silvera

low approach. I'd you has the to like last for the which in ZIM thank company a Integrated that the to has Shipping, want gone can what I've virtually And weeks I of done has no of to a within be something a it $XX to virtually a around really share. a you at that exemplifies XX stock currently from debt. company very when it's have debt. where market, called I company no And trading, much strongly observed trading seen mention Well, shipping XX has

And encourage so to that. definitely study I you

As rates if of debt going need accumulate full the – time which that would have a a that possibility comes cash we adopting no we that up approach, without when again. for additional stay then then new not especially them ships while, only for heavy we around, into debt can

the love So see for would shareholder now, me this as for straight years put share of to various many out. and different right you out put a that the have instead cover now, before, options that at buying volume instance, shares, so straight and periods options I've selling of actually at are months outstanding of enough take let's we at spoken look kind there $X thing the you, a purchased a say final to

a which these cash outstanding months course, really that go $X.XX means, And options, many put you look out you're that bargain. in the give how get if put and as at enough, that a or the of options those currently, we went it. $X it, floor you screaming would if Please for the to and a give it us neighborhoods would in to definitely effect, $X, I a share. far buying is, So to buying share would namely share, at encourage stock you $X.XX be consider below there so possibility of where come? can examine are a which flow in for

Svein Moxnes Harfjeld

take for we Well, your note input, of that. you thank

Operator

you. Thank

Our next ask question Please your question. from comes [indiscernible].

Unidentified Analyst

road additional you you I impact, How some Good overall wondering for much And market. the you the waiving approximately? Thank you cautiously optimistic incremental In expect? the morning. you remain market demand insight have on on on taking if sanctions the potential press could Iran would was mentioned of the questions. tanker would my release, provide

Svein Moxnes Harfjeld

XX It's there also hard exact here, but trading figure this to And tankers we crude. around have not Venezuelan is to but some large that estimate an oil. in involved XX sanction only are

trick sold And in the trade. the are And that being are a think game this have discount to legit, order to will a to is access ships Once of then I to normal entice at off. they premium market. these to currently those burned. market sort willing buy the freight barrels here barrels the get pay the older ships those freight of become be center that to sanction They can do oil them.

will sort is this go it will ship that the of oil and the more be illicit for So be market. regular fleet of out just moved

oil exactly but X don't million an be So have are figure. I should the net-net, is, barrel exact could number we be. per positive. say be will day, a It's in that additional hard the much it to how it what that But think there some indications

Trygve P. Munthe

I a XX time. a add, it will or think If XX because barrels within more it relatively short ships I huge for may be be I transportation, and difference be there would will personally, retire

to be personally a a think. totally I So combination more is meaningful supply demand going market freight different in of decrease the and

Unidentified Analyst

it on a And be time again. if benefits I wondering And you also take you. be was part long say believe the a Thank provide will once will offset of we some positive. online some it and could it significant people Iranian will say some commentary these fleet, to

that? could provide commentary So you some on

Svein Moxnes Harfjeld

XX.X I of average The fleet I'm Iranian XX is, vessels fleet, count age wrong think, the and not VLCC that years. if

And ships young efficient to a fleet. store Iran of not are a it's buffer. these So and used many oil as floating of

the sort make chart sort at this tough all entire that fully fleet be to So it efficient marketable of will terminals world. to and of around

of barrels. of So of of I these sort Maybe don't offset with them already trade, are all trading ships that will think but some that. will some

you not a there today. are new like not flood it's that ships have – So of

maybe So limited a impact.

Unidentified Analyst

right. helpful. very Thank you That’s All much.

Operator

Thank no remarks. to team closing you. are the for back turn [Operator Instructions] management There I'll the further the now questions. call

Svein Moxnes Harfjeld

my offering in to all And very for friend also for day. you thank you a on good his listening Well, Have retirement. DHT. on much business Trygve good thank

Operator

for right. our you gentlemen, and Thank you. does participating. that today. for Ladies conclude conference All Thank

You may all disconnect.

DHT (DHT) 8 Feb 222021 Q4 Earnings call transcript