DHT Holdings, Inc. Third Quarter 2024 Results

DHT Holdings, Inc. yesterday announced its results for the quarter ended September 30, 2024.

QUARTERLY HIGHLIGHTS:

•In the third quarter of 2024, the Company achieved average combined time charter equivalent earnings of
$42,400 per day, comprised of $43,700 per day for the Company’s VLCCs operating in the spot market and
$38,800 per day for the Company’s VLCCs on time-charter. Average spot rate for the quarter for vessels below 15-years of age was $47,600 per day.
•Adjusted EBITDA for the third quarter of 2024 was $70.4 million. Net profit for the quarter was $35.2 million, which equates to $0.22 per basic share.
•The Company entered into a one-year time charter contract for DHT Lion, built in 2016. The time charter contract has a rate of $55,000 per day and the vessel was delivered into the time charter contract toward the end of the third quarter.
•In the third quarter of 2024, the Company paid $25.8 million as installments under its newbuilding program. To date, the Company has paid a total of $77.3 million under its newbuilding program.
•For the third quarter of 2024, the Company declared a cash dividend of $0.22 per share of outstanding common stock, payable on November 29, 2024, to shareholders of record as of November 22, 2024. This marks the 59th consecutive quarterly cash dividend and is in line with the Company’s capital allocation policy to pay out 100% of ordinary net income. The shares will trade ex-dividend from November 22, 2024.

OPERATIONAL HIGHLIGHTS:

Chinese economic growth and oil demand have year-to-date not met projections. Whilst China is deploying various inducements to its economy, we are yet to see “whatever it takes” levels of economic policy changes and stimuli. We do however think it is reasonable to expect efforts from China, which should revitalize the economy and lead to an uptick in demand.

By restraining production, OPEC+ aims to balance the market and support prices, especially in the face of increasing competition from Atlantic basin producers. This strategy also includes targeting Asian customers’ inventory levels of crude oil below the five-year average, creating a tighter market for when economic conditions improve.

However, limited transparency in China’s crude oil inventory data complicates assessments of actual levels. If Chinese inventories are indeed low as indicated and, as Western inventories are relatively higher than in Asia, one should expect Atlantic based barrels to increasingly go East. Additionally, recovering refinery margins in Asia in combination with increasing Chinese crude oil import quotas heading into next year should shift the dynamics in favor of a stronger freight market.

The result of the US election leads us to expect certain policy changes that we believe will be constructive for our business:

•Tightening of Iranian sanctions that should re-impose pressure on Iranian oil exports, barrels that could be replaced by other Middle Eastern producers.
•Reversal of current decarbonization regulations, implying higher medium-term demand for fossil fuels towards 2030.
•Pro-drilling policies should further stimulate US production growth and exports.

We believe we have an appropriate strategy tailored to the structure of our market; focusing on solid customer relations offering safe and reliable services, maintaining a competitive cost structure with robust break-even levels, a solid balance sheet, and a clear capital allocation policy. The whole DHT team continues to work hard and operate with leading governance standards and a high level of integrity.

OUTLOOK:

•Thus far in the fourth quarter of 2024, 64% of the available VLCC spot days have been booked at an average rate of $41,000 per day on a discharge-to-discharge basis. 74% of the available VLCC days, combined spot and time- charter days, have been booked at an average rate of $40,600 per day.

THIRD QUARTER 2024 FINANCIALS

The Company reported shipping revenues for the third quarter of 2024 of $141.1 million compared to shipping revenues of $130.3 million in the third quarter of 2023. The increase from the 2023 period to the 2024 period includes $5.5 million attributable to increased total revenue days and $5.3 million attributable to higher time charter rates.

Other revenues for the third quarter of 2024 were $1.0 million compared to $1.2 million in the third quarter of 2023 and relate to technical management services provided.

Voyage expenses for the third quarter of 2024 were $48.5 million, compared to voyage expenses of $41.2 million in the third quarter of 2023. The change was related to an increase in bunker expenses of $8.1 million and an increase in other voyage-related costs of $0.3 million, partially offset by a decrease in port expenses of $1.2 million. The increased bunker expense in the third quarter of 2024 is mainly due to one additional vessel in the fleet and fewer off hire days. Voyage expenses will in general vary depending on the actual trading patterns during a quarter.

Vessel operating expenses for the third quarter of 2024 were $19.0 million compared to $18.6 million in the third quarter of 2023. The increase was mainly related to an additional vessel in the fleet.

Depreciation and amortization, including depreciation of capitalized survey expenses, was $28.1 million for the third quarter of 2024, compared to $28.3 million in the third quarter of 2023. The decrease was mainly due to decreased depreciation of drydocking and exhaust gas cleaning systems of $0.6 million, partially offset by increased depreciation of vessels $0.4 million due to an additional vessel in the fleet.

General and administrative (“G&A”) expense for the third quarter of 2024 was $4.2 million, consisting of $3.2 million cash and $1.0 million non-cash charges, compared to $4.3 million in the third quarter of 2023, consisting of $3.5 million cash and $0.8 million non-cash charges. Non-cash G&A includes accrual for social security tax. Net financial expenses for the third quarter of 2024 were $7.0 million compared to $8.0 million in the third quarter of 2023. The decrease was mainly due to decreased interest expenses of $1.5 million due to a decline in interest rates, partially offset by a $0.3 million increase related to currency loss and a $0.2 million decrease in interest income.

As a result of the foregoing, the Company had a net profit in the third quarter of 2024 of $35.2 million, or earnings of $0.22 per basic share and $0.22 per diluted share, compared to a net profit in the third quarter of 2023 of $31.0 million, or earnings of $0.19 per basic share and $0.19 per diluted share. The increase from the third quarter of 2023 to the third quarter of 2024 was mainly due to a $3.2 million increase in operating income and a $1.0 million decrease in net financial expenses.

Net cash provided by operating activities for the third quarter of 2024 was $80.1 million compared to $55.7 million for the third quarter of 2023. The increase was due to a net profit of $35.2 million in the third quarter of 2024 compared to a net profit of $31.0 million in the third quarter of 2023, and a $20.3 million change in operating assets and liabilities, partially offset by a decrease in non-cash items included in net profit of $0.1 million.

Net cash used in investing activities was $27.9 million in the third quarter of 2024, comprised of $25.8 million related to investment in vessels under construction and $2.0 million related to investment in vessels. Net cash used in investing activities was $93.0 million in the third quarter of 2023 and was related to investment in vessels.

Net cash used in financing activities for the third quarter of 2024 was $51.6 million comprised of $43.6 million related to cash dividend paid and $7.6 million related to scheduled repayment of long-term debt. Net cash used in financing activities for the third quarter of 2023 was $19.3 million comprised of $56.7 million related to cash dividend paid, $45.0 million related to prepayment of long-term debt, $9.9 million related to purchase of treasury shares and $6.9 million related to scheduled repayment of long-term debt, partially offset by $99.5 million related to issuance of long- term debt.

As of September 30, 2024, the cash balance was $73.8 million, compared to $74.7 million as of December 31, 2023. The Company monitors its covenant compliance on an ongoing basis. As of September 30, 2024, the Company was in compliance with its financial covenants.

As of September 30, 2024, the Company had 161,464,487 shares of common stock outstanding compared to 160,999,542 shares as of December 31, 2023.
The Company declared a cash dividend of $0.22 per common share for the third quarter of 2024 payable on November 29, 2024, for shareholders of record as of November 22, 2024.

NINE MONTHS 2024 FINANCIALS

The Company reported shipping revenues for the first three quarters of 2024 of $437.1 million compared to $413.8 million in the first three quarters of 2023. The increase from the 2023 period to the 2024 period includes $25.8 million attributable to increased total revenue days, partially offset by $2.5 million attributable to lower tanker rates.

Other revenues for the first three quarters of 2024 were $3.3 million compared to $3.4 million in the first three quarters of 2023 and relate to technical management services provided.

Voyage expenses for the first three quarters of 2024 were $134.4 million compared to voyage expenses of $117.9 million in the first three quarters of 2023. The change was mainly related to an increase in bunker expenses of $18.5 million, partially offset by a decrease in port expenses of $2.7 million. The increased bunker expense in the first three quarters of 2024 is mainly due to one additional vessel in the fleet, more vessels in the spot market and fewer off hire days. Voyage expenses will in general vary depending on the actual trading patterns during the period.

Vessel operating expenses for the first three quarters of 2024 were $58.6 million compared to $56.7 million in the first three quarters of 2023. The increase was mainly related to an additional vessel in the fleet and insurance deductibles.

Depreciation and amortization, including depreciation of capitalized survey expenses, was $84.3 million for the first three quarters of 2024, compared to $80.4 million in the first three quarters of 2023. The increase was mainly due to increased depreciation of vessels and drydocking of $3.2 million due to an additional vessel in the fleet and an increase in depreciation of exhaust gas cleaning systems of $0.7 million.

G&A for the first three quarters of 2024 was $13.4 million, consisting of $10.5 million cash and $2.9 million non- cash charges, compared to $13.5 million, consisting of $10.8 million cash and $2.7 million non-cash charges for the first three quarters of 2023. Non-cash G&A includes accrual for social security tax.

Net financial expenses for the first three quarters of 2024 were $22.6 million, compared to $22.2 million in the first three quarters of 2023. The increase was due to decreased interest income of $0.5 million, $0.3 million related to currency loss and increased interest expense of $0.1 million, partially offset by a non-cash loss of $0.5 million related to interest rate derivatives in the first three quarters of 2023.

The Company had a net profit for the first three quarters of 2024 of $126.7 million, or earnings of $0.78 per basic share and $0.78 per diluted share compared to a net profit of $126.1 million, or earnings of $0.77 per basic share and $0.77 per diluted share in the first three quarters of 2023. The difference between the two periods was mainly due to a $1.1 million increase in operating income, partially offset by a $0.4 million increase in net financial expenses.

Net cash provided by operating activities for the first three quarters of 2024 was $232.9 million compared to $209.1 million for the first three quarters of 2023. The increase was mainly due to a net profit of $126.7 million in the first three quarters of 2024 compared to a net profit of $126.1 million in the first three quarters of 2023, a $19.0 million change in operating assets and liabilities, and a $4.1 million increase in non-cash items included in net profit.

Net cash used in investing activities for the first three quarters of 2024 was $84.0 million comprised of $77.3 million related to investment in vessels under construction and $6.6 million related to investment in vessels. Net cash used in investing activities for the first three quarters of 2023 was $122.8 million comprised of $125.9 million related to investment in vessels, partially offset by $3.3 million related to proceeds from sale of derivatives.

Net cash used in financing activities for the first three quarters of 2024 was $150.0 million comprised of $125.9 million related to cash dividends paid, $74.0 million related to prepayment of long-term debt and $24.1 million related to scheduled repayment of long-term debt, partially offset by $75.0 million related to issuance of long-term debt. Net

cash used in financing activities for the first three quarters of 2023 was $138.2 million comprised of $216.8 million related to repayment of long-term debt in connection with refinancing, $156.1 million related to cash dividends paid, $45.0 million related to prepayment of long-term debt, $18.8 million related to purchase of treasury shares and $15.6 million related to scheduled repayment of long-term debt, partially offset by $315.7 million related to issuance of long-term debt.

Full Report

Source: DHT Holdings, Inc.