DHT(US:DHT)2025-02-06 15:35Financial Data and Key Metrics Changes - The fourth quarter ended with total liquidity of $258 million, consisting of $78 million in cash and $180 million available under revolving credit facilities [7] - Revenues on a TCE basis for Q4 were $85.5 million, with EBITDA of $60.6 million and net income of $54.7 million, equating to $0.34 per share [8] - For the full year 2024, net income was $181.5 million, or $1.12 per share, adjusted for non-cash impairment charges [11] Business Line Data and Key Metrics Changes - Vessel operating expenses for Q4 were $20 million, while G&A expenses were $5.6 million, including a non-recurring item of $0.7 million [9] - The average TCE for all vessels in the spot market was $38,200 per day, with spot vessels under fifteen years achieving $40,500 per day [10] Market Data and Key Metrics Changes - The current spot market for modern vessels with exhaust gas cleaning systems is in the $55,000 to $60,000 range [32] - The estimated spot terminal breakeven for Q1 is $21,700 per day, indicating potential net income contribution from the spot fleet [25] Company Strategy and Development Direction - The company plans to allocate cash proceeds from the sale of the DHT Scandinavia to general corporate purposes, including investments in vessels, share buybacks, and debt prepayment [17] - The company has a capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividends, marking the sixtieth consecutive quarterly cash dividend [20] Management's Comments on Operating Environment and Future Outlook - Management noted that the VLCC fleet is set to shrink while demand for services is growing, with an estimated 444 VLCCs to be older than fifteen years by the end of 2026 [26] - The company expects sanctions and tariffs to disrupt trade but believes VLCCs will be in high demand, particularly due to changes in procurement behavior in China [30] Other Important Information - The company repurchased 1.5 million shares in December at an average price of $8.89, which is expected to be accretive to earnings per share [16] - The company has secured a one-year time charter for DHT China at $40,000 per day, commencing at the end of January [19] Q&A Session Summary Question: Fleet development and derisking older vessels - Management indicated they might consider divesting older ships depending on time and price, with two ships on time charter continuing to operate [38][40] Question: Financing plan for new builds - The base case for debt financing new ships is $60 million per vessel, with potential adjustments based on negotiations [42] Question: Recent jump in VLCC spot rates - Management noted that the market is tight, driven by inventory changes and refining margins in China, with a potential tipping point in the market [52][56] Question: Capital allocation and buybacks - Management clarified that buybacks were based on available resources and not solely dependent on the sale of the DHT Scandinavia [59] Question: Impact of sanctions on rates - Management acknowledged that sentiment has been a primary driver, but changes in oil procurement behavior in China are also influencing demand [68] Question: Shadow fleet trading - Management stated that tracking the shadow fleet is difficult, but inefficiencies in this fleet could lead to increased demand for compliant vessels [72][74] Question: Future of older VLCCs - Management expressed skepticism about the commercial viability of VLCCs older than twenty-five years due to terminal acceptance issues [76] Question: Time charter market demand - Management noted that end users are increasingly looking to build up fleets as time charters expire, indicating real demand for fixed income opportunities [104]