DHT Holdings, Inc. Aktie

Good day, and thank you for standing by. Welcome to the Q2 2026 DHT Holdings, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Laila Halvorsen, CFO. Please go ahead.

Thank you. Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings Second Quarter 2026 Earnings Call. I am joined by DHT's President and CEO, Svein Moxnes Harfjeld. As usual, we will go through financials and some highlights before we open up for your questions. The link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks.

A replay of this conference call will be available on our website, dhtankers.com, until August 13. In addition, our earnings press release will be available on our website and on the SEC EDGAR system as an exhibit to our Form 6-K. As a reminder, on this conference call, we will discuss matters that are forward-looking in nature. These forward-looking statements are based on our current expectations about future events as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements.

We urge you to read our periodic report available on our website and on the SEC EDGAR system, including the risk factors in these reports for more information regarding risks that we face. As usual, we will start the presentation with some financial highlights. The second quarter of 2026 was by far the strongest quarter in the company's history, reflecting strong tanker market conditions and commercial performance.

In the second quarter, we achieved revenues on TCE basis of $255 million and adjusted EBITDA of $231 million. Net income came in at $198.3 million, equal to $1.23 per share. After adjusting for the non-cash fair value gain related to interest rate derivatives of $1.3 million, we had ordinary net income for the quarter of $197 million, equal to $1.22 per share. Vessel operating expenses for the quarter were $18.6 million, and G&A for the quarter was $5.6 million, which included approximately $0.7 million in nonrecurring noncash costs related to shares vested in the second quarter.

In terms of market performance, our vessels trading in the spot market earned an average of $162,600 per day, while the vessels on time charters achieved $90,800 per day. The average combined TCE for the fleet in the quarter was $126,700 per day. Furthermore, revenue on a TCE basis for the first half of the year totaled $412.2 million, while adjusted EBITDA reached [ $364.3 million ]. Net income was $362.9 million, exceeding DHT's previous full year record earnings of $266.3 million achieved in 2020 and establishing a new earnings milestone in the company's history.

For this period, our vessels trading in the spot market earned an average of $124,700 (sic) [ $162,700 ] per day, while the vessels on time charters achieved $77,300 (sic) [ $90,800 ] per day. The achieved combined TCE for the fleet was $102,900 (sic) [ $126,700 ] per day. We continue to maintain a very strong balance sheet, supported by conservative leverage and robust liquidity. At the end of the second quarter, total liquidity was [ $569 million ], consisting of $161.7 million in cash and $407.5 million available under our revolving credit facilities.

At quarter end, financial leverage was 14.1% based on market values for the fleet and net debt was $11.9 million per vessel, well below estimated residual values. Looking at our cash flow, we began the quarter with a cash balance of $126 million. During the quarter, operations generated $231 million in EBITDA. Debt repayment and cash interest totaled $20 million and [ $103 million ] was distributed to shareholders through a cash dividend. In addition, we invested $7.2 million in vessels, $1.3 million in vessels under construction, and we also prepaid $56 million in long-term debt. Changes in working capital and other items amounted to $7.3 million, and the quarter ended with $161.7 million in cash.

With that, I will turn the call over to Svein to go through the quarterly highlights.

Thank you, Laila. I will now walk through our key quarterly highlights. Strong market conditions were driven not only by fundamental supply and demand dynamics, but also by ongoing market consolidation and regional disruptions, most notably stemming from the conflict involving Iran, which drove a significant expansion of global ton-miles. Crucially, DHT's operational framework prioritizes the safety of our crew, cargo and vessels above all else.

In line with this policy, our fleet did not trade in the Persian Gulf during this period. Our teams delivered solid results through operational excellence without having to pursue trades to chase premium freight in the high-risk conflict areas. We capitalized on strong term demand by securing two additional time charter contracts during the quarter for two of our older ships.

Both the DHT Sundarbans built 2012 and DHT Amazon built 2011 entered into 1-year contract with an average rate of $109,000 per day. Looking to our long-term fleet development, we contracted a newbuild VLCC at Hanwha Ocean for early delivery in August '28. She will be named DHT Oryx and will be a sister ship to the DHT Antelope and DHT Addax, both delivered from Hanwha Ocean earlier this year. The DHT Oryx will feature large carrying capacity and will come equipped with an exhaust gas cleaning system.

We secured a new $250 million reducing revolving credit facility. All the banks in our banking universe participated, and it's fair to add that it was meaningfully oversubscribed. The facility has a 7-year tenor, a 20-year repayment profile and is priced at 135 basis points above SOFR. Additionally, it has an uncommitted accordion feature of $250 million.

Moving to events subsequent to the quarter. First, we secured a 3-year time charter at $75,000 per day with a global energy company for the 2015-built DHT Jaguar, which is scheduled to deliver into the contract this September. Second, in line with our strategy to divest older tonnage, we finalized the sale of the 2007-built DHT Bauhinia, delivering her to the new owner in July. This transaction generated $51 million in total cash proceeds and a net capital gain of $34 million. Lastly, in July, we took delivery of the DHT Impala from Hyundai. This represents the fourth and final newbuilding in our 2026 fleet program.

Referring to our prior disclosures, the vessel was successfully delivered with the intended design upgrades completed. And back to you, Laila.

Thank you. In line with our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividends, the Board has approved a dividend of $1.22 per share for the second quarter of '26. This marks our 66th consecutive quarterly cash dividend. The shares will trade ex dividend on August 17, and the dividend will be paid on August 24 to shareholders of record as of August 17. Here, we also present our estimated P&L and cash breakeven levels for the second half of 2026.

Our P&L breakeven for the period is estimated at $29,700 per day, while our cash breakeven is estimated at [ $22,600 ] per day, which reflects all [ true ] cash costs. The difference between our P&L and cash breakeven is then estimated at [ $7,100 ] per day. This discretionary cash flow will remain within the company and be allocated for general corporate purposes.

On this slide, we present an update on bookings to date for the third quarter of '26. We expect 1,020 time charter days covered for the third quarter at an average rate of $75,900 per day. This rate includes profit sharing for the month of July and the base rate only for the month of August and September for contracts with a profit sharing feature. We also anticipate 1,029 spot days for the quarter, of which 58% or 600 days have been booked at an average rate of $152,700 per day. The spot P&L breakeven for the quarter is estimated to be less than 0 as the time charter earnings are expected to exceed forecasted costs.

Turning to our 2026 dry dock schedule. As shown on this slide, we have 7 vessels due for dry docking during the year. DHT Lion completed its dry dock in the first quarter, while DHT Amazon, DHT Osprey and DHT Puma completed their dry docks in the second quarter. DHT Panther completed its dry dock earlier this week and all planned dry docks were completed on time and within our expectations.

Looking at the remainder of the program, two vessels, DHT Harrier and DHT Redwood are scheduled to undergo their second and third special survey and dry docks, respectively, during the second half of '26. Upon completion of these surveys, we will have completed this year's dry dock program and enter 2027 with only 4 vessels scheduled for dry dock during next year, providing a rather light maintenance schedule from an operational and commercial perspective.

And now I'll turn the call back to Svein.

Thanks, Laila. We will now turn to current market dynamics where several structural forces are shaping the tanker landscape. Geopolitical friction and risk premiums. Middle East hostilities continue to force vessel rerouting, expanding ton-mile demand and squeezing overall fleet efficiency. While most operators, including DHT, avoid high-risk zones, operators willing to venture into the Persian Gulf are extracting substantial risk premiums.

Structural supply consolidation. Spot supply remains tightly constrained following major fleet consolidation by a private aggregator earlier this year, which has reduced fragmented spot capacity. Asset price floor. Secondhand asset values continue to see strong institutional support, underpinned by acquisitions by a Middle Eastern national energy company at premium valuations.

China's shock absorber strategy. China temporarily blunted global oil price spikes by drawing on its strategic and commercial crude stockpiles while curbing refined product export quotas. Once this destocking cycle runs its course, we expect a sharp rebound in China's seaborne crude import demand. Looking ahead, we see two primary structural catalysts driving market fundamentals. First, resolution versus continuation of regional conflict.

If resolved, an operational mechanism for conflict resolution should normalize Iranian crude flows into compliant trade channels. This would shift transport volumes away from the noncompliant shadow fleet to independent compliant operators like DHT, substantially expanding our addressable market. If unresolved, long-haul crude routes will persist. While the shadow fleet may continue trading, its need for vessel replacements will support secondhand asset values and ultimately force the retirement of the fleet's oldest tonnage.

Secondly, energy security and strategic reserve replenishment. Heightened global focus on energy security will necessitate a massive rebuilding of depleted national strategic and commercial inventories. This replenishment cycle will generate sustained transportation demand well beyond baseline daily crude consumption. To wrap up, our operational strategy focuses on creating healthy risk-adjusted shareholder value across the market cycles.

Securing high-margin fixed cash flow. We continue to lock in highly profitable revenue streams of fixed income across various tenors, backing up our forward cash generation and dividend capacity. Balanced market exposure. We maintain a deliberate balance retaining significant spot market upside to capture rate spikes while layering on selective charter coverage to create cash flow and dividend visibility.

Disciplined capital allocation. Our commitment to returning value remains absolute. We continue to operate under a capital allocation framework designed to translate market tailwinds directly into shareholder returns via quarterly cash dividends. Thank you for your time today. Operator, we are now ready to open the floor for questions.

[Operator Instructions]

And your first question today comes from the line of Omar Nokta from Clarksons.

I have a couple of questions. And maybe just first on Svein, you mentioned avoiding the Persian Gulf given the high-risk area there. But I wanted to ask about the situation in the Red Sea and how that's maybe affected what you're doing in that region. If I recall, you've been busy and others have been busy taking some of that Saudi crude from Yanbu, taking it to Asia. And obviously, there's been a step-up in hostilities or at least a threat of it. What's happened there? Has that affected how you're trading your VLCCs in the region? And I guess, how do you think about those Yanbu volumes moving going forward?

So at the get-go, we did several Yanbu loadings, both entering the Red Sea, but also exiting through the BAM Strait. So that has become a bit more challenging as of late following the threats from the Houthis. And the result of that is that our ships have then typically exited the Red Sea through the Suez Canal. And then rerouted, of course, then adding significant transportation distances to the transportation work being conducted. And that is, I think, fair to say most of the VLCC loadings, not just ours, have been directed northwest bound.

Okay. And do you think that, that is direct lifting from Yanbu and then offloading partially ahead of the Suez Canal? Or are you starting to load directly out of the Med and that's become a new trade pattern?

It's both. So we have ships loading at Yanbu, you need to offload about half of the cargo in order for the VLCC to transit the canal, and then you reload on the other end. There are also some ships, not ours or under our sort of commercial control that are shuttling between Yanbu and Ain Sukhna. One of our time charter contracts is involved in that business. But there's also been some fixtures now with ships coming from the Atlantic Basin mostly, then loading directly at Sidi Kerir in the Med, in Egypt and then taking cargoes either to Europe or out to the Far East. So there's a mix of things. But all of this, again, is just creating disruption, reducing the efficiency of the fleet and thereby making the general markets much tighter.

Yes, definitely. And then maybe just a second question, a bit more big picture on DHT specifically. You're taking -- I think you took the final of the four newbuildings due this year. You have the one that you recently ordered that's coming in 2028. The fleet now stands at 23, going to 24. Svein, you had mentioned a couple of months back that looking to expand DHT's footprint. Is that still the aim and going beyond sort of the 24 vessels that are spoken for? And how would you go about doing so? Secondhand market, obviously, values are high? Or is it more new buildings?

No, it's our general ambition to continue to build out DHT. But as you rightly point out, secondhand values right now are in a territory, making it challenging to, I think, invest for us. So patience here is key. There could, of course, be some corporate opportunities in due course and which we will look at. We've done a couple of those historically, one in '14 and one in '17. But it's not easy, right? But rest assured that our eyes are on continuing to build out the company, but it has to be at valuations and sort of financial conditions that ensures that there is also profitable growth for the company, not just buying assets for the sake of buying assets.

We will now go to our next question. And the question comes from the line of Gregory Lewis from BTIG.

Lars (sic) [ Svein ], just realizing it's definitely a fluid situation. But I guess earlier this week, there was talk of European mine sweepers potentially entering going into the [ strait ] to kind of get things more in a position. Realizing there's not a real answer, but if you thought about how you think this could proceed in the event that there is some sort of agreement and the mine sweepers are there to kind of clean out who knows what's in there.

How long after that do you think things could actually return to normal? And what I mean by that is companies like DHT and other companies that have certain requirements, standards, limitations on what they're willing and not willing to do, really, you need a real open canal. Like we're here in August. What do you think is the most -- a blue sky opportunistic time where things might actually return to normal?

The simple answer, I don't know. And that's just how it is, right? And as you rightly point out, it's sort of -- the news flows is both volatile and fluid, and it's very hard to sort of make decisions on it because you might have some statement on a Wednesday and you're going to fix a ship that might sort of enter the area in 10 days, two weeks, three weeks, right? And things can change in that period. So it's very hard to make sort of credible plans.

I think in general terms, we would like to see then the prospective opening of the straits to be credible, meaning that we see numerous transits and it's all safely done, and it's not sort of selectively trying to attack certain ships over other ships or certain nationalities over other nationalities or certain cargoes over other cargoes, things like that. So we will unlikely be the first mover into this operation. But we are, of course, keen to -- for this market to return to sort of more normality, right? So let's hope for this to happen in not too long.

Okay. Great. And then realizing the Oryx is getting delivered in '28, and I think you kind of were talking about this with Omar. Like as we think about fleet positioning and the time it takes to get a string of new orders, at this point, if we're in August '26, when -- barring resales, when could we actually see the turnaround time between placing a vessel order and actually taking delivery of a vessel, a string of newbuild VLCCs?

Yes. So it depends a bit on which country and which shipyard you want to order at. Typically, we have been loyal to Hyundai and Hanwha Ocean in Korea and the sort of opportunities at those two shipyards are for 2030 delivery. There is a sort of revival of an earlier closed shipyard in Korea that is offering a bit earlier delivery, but they -- I guess, at the shipyard, they will have to demonstrate or make clients comfortable with how that revival of that shipyard is being made.

I think that the high -- top end shipyards in China that has the most experience, that's also 2030 delivery. Whereas you've seen these last few months, you've seen a number of orders at shipyards with sort of no prior experience in building tankers, but maybe with great experience in building other types of equipment that has been able to offer earlier deliveries. So I would say today, if you're willing to venture into the latter category, that's probably a '29 window, whereby sort of the more established high-end shipyards in Korea and Japan is 2030.

Okay. And then just one more for me real quick. I guess what, around 25% of the fleet rolls off contract in early '27, I think in Q1 or maybe early Q2. Do any of those vessels, I think there's like five to six of them. Do any of those have customer options that could see those extended longer?

No, there's limited options left in our sort of time charter fleet now. So all these five 1-year contracts that we did in the first half is only for one year, no optional periods. We have a couple of legacy charters that will -- the firm periods will expire end of next year, if my recollection is correct. And they have some optional periods. But the 3-year charter we just announced has no optional period. The long-term charter we announced in March has sort of a wider window, if you like, but that's a very long-term charter.

So it's nothing to think too much about for next year. So as of now, our cover for next year is about 1/4 of the fleet is on fixed income, which one has a profit sharing, right, for the full year. The last one with profit sharing will redeliver in the first quarter and we're down to below 20% coverage for '28. But this is going to be a little bit of an evolving portfolio. So we have some customers that are interested in developing more business with us. So we'll just take our time, and we'll be patient about it.

[Operator Instructions]

And our next question today comes from the line of Eirik Haavaldsen from Pareto Securities.

Just on the -- to talk a little bit more about those time charters. Five of those vessels are obviously your five oldest ones, [ Nomikos ] vessels. And I guess given your track record and must be tempting to kind of try to at least exploit current asset values and try to sell them. But would you do that without any kind of replacement? So I guess my question is fleet size wise, could you sell those 15-year-olds without any kind of newbuilds in the pipeline?

We are sort of focused on maintaining earning capabilities or capacity, right, with the fleet. So in the sort of scenario that we would like is not to dispose of those ships without having a clear path for sort of renewals and hopefully also expansion as a net result. So that being said, these values, as you say, are very high now.

But these five ships are also in a very, very good condition and can service the industry easily for the remaining five, six years, if not longer, if need be. So it's a bit of a -- it's not an easy path to execute on all of that, but that's how we think about it. So ideally, we would like to have a replacement plan. That can be a combination of things. But if we decide at some point to divest them. But as of now, there's no divestment plans for those assets.

So it will be kind of a decision as you -- when you get there, whether to charter them out or of course, you can trade them, but I mean, we saw today also announced charter with start-up three months into the future. Is that market at all liquid? Or is it something you can do now charter out vessels will start up, I mean, almost into '27?

You can -- I think the way it works is that you can create that liquidity with pricing the forward delivery at a discount to relatively prompt delivery. So how deep the liquidity is maybe is not so active because most people that want a 1-year charter, they want to have a pretty clear idea what the first cargo sort of the kickoff with the charter is going to be and how much profit they're going to make on that.

So that's the common part. But if you -- I would say today that the 1-year charter for modern ship is probably 120 (sic) [ $120,000 ], 125 (sic) [ $125,000 ], maybe in that range. So forward delivery, I think on this reported picture was just sub-$110 (sic) [ sub-$110,000 ], if my recollection is correct. So that's sort of probably the -- what has been put on the table to entice that forward delivery. I would assume, although I don't have the insights of the negotiations of that charter.

We currently have no further questions. I will now hand the call back to Svein for closing remarks.

Thank you very much for everyone tuning into DHT. Much appreciated and wishing you all a good day ahead.

Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.

Good day, and thank you for standing by. Welcome to the Q1 2026 DHT Holdings, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, CFO, Laila Halvorsen. Please go ahead.

Thank you. Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings First Quarter 2026 Earnings Call. I'm joined by DHT's President and CEO, Svein Harfjeld.

As usual, we will go through financials and some highlights before we open up for your questions. The link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available on our website, dhtankers.com, until May 13.

In addition, our earnings press release will be available on our website and on the SEC EDGAR system as an exhibit to our Form 6-K. As a reminder, on this conference call, we will discuss matters that are forward-looking in nature.

These forward-looking statements are based on our current expectations about future events as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements.

We urge you to read our periodic report available on our website and on the SEC EDGAR system, including the risk factors in these reports for more information regarding risks that we face. As usual, we will start the presentation with some financial highlights.

In the first quarter of 2026, we achieved revenues on TCE basis of $157 million and adjusted EBITDA of $133 million. Net income came in at $164.5 million, equal to $1.02 per share.

After adjusting for the $60 million gain on sale of DHT Europe and DHT China and a non-cash fair value gain related to interest rate derivatives of $1.1 million, we had ordinary net income for the quarter of $103.4 million equal to $0.64 per share.

Vessel operating expenses for the quarter were $19.1 million, which included approximately $2 million in non-recurring costs related to spares and consumables. And G&A for the quarter was $5 million.

In terms of market performance, our vessels trading in the spot market earned an average of $91,700 per day, while vessels on time charters achieved $61,300 per day. The average combined TCE for the fleet in the quarter was $78,800 per day.

We continue to maintain a very strong balance sheet, supported by conservative leverage and robust liquidity. At the end of the first quarter, total liquidity was $350 million, consisting of $126 million in cash and $230 million available under our two revolving credit facilities.

Following the repayment of $56 million in April under the Nordea revolving credit facility, current availability under our 2 RCFs stands at $285.8 million.

At quarter end, financial leverage was 16.8% based on market values for the fleet and net debt was $16.5 million per vessel, which is well below estimated residual values.

Looking at our cash flow, we began the quarter with $79 million in cash. From operations, we generated $133 million in EBITDA. Debt repayment and cash interest totaled $20 million. Proceeds from sale of DHT Europe and DHT China amounted to $201 million and $66 million was distributed to shareholders through a cash dividend. $2.8 million related to investments in vessels and $160 million was deployed towards investments in vessels under construction, which included delivery of our first three new buildings.

We also issued $91.5 million in long-term debt. Changes in working capital and other items amounted to $30 million, and the quarter ended with $126 million in cash. With that, I will turn the call over to Svein to go through the quarterly highlights.

Thank you, Laina. We are very pleased with the well-time delivery of the first three of our four new buildings in the Antelope class. The DHT Antelope delivered in January, the DHT Addax and DHT Gazelle in March.

The fourth vessel, DHT Empower is expected to deliver this summer. This represents fleet renewal in conjunction with planned divestment of our three older ships built in 2007, two of which have been delivered.

The last of the three, DHT Bauhinia, was sold for $51.5 million in the quarter and is expected to deliver in June, July. We expect a capital gain of $34.2 million and cash proceeds of $50.5 million from this last sale.

Our planned increase of market exposure for the first half of this year had the objective not only to benefit from the spot market, but also to balance this with selective new term employment. It has been a busy period with numerous contracts secured.

First, the DHT Harrier built 2016 with their existing time charter due to expire, extended the contract for 5 years from January 26 at $47,500. It has two optional years priced at $49,000 and $50,000.

We then secured three new 1-year time charters. DHT Opal built 2012 for 1 year at $90,000; DHT Taiga built 2012 for 1 year at $94,000; DHT Redwood built 2011 for 1 year at $105,000.

Further, one of our newbuildings delivered into a 5 to 7-year time charter with a key customer. Subsequent to the quarter end, we secured two additional 1-year time charters for DHT Sundarbans built 2012 and DHT Amazon Built 2011 with average rate of $109,000 per day.

As such, our Five older ships are then out on 1-year time charter contracts averaging $101,000 per day. Back to you, Laila.

Thank you. In line with our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividends, the Board has approved a dividend of $0.64 per share for the first quarter of 2026.

This marks our 65th consecutive quarterly cash dividend. The shares will trade ex-dividend on May 21, and the dividend will be paid on May 28 to shareholders of record as of May 21.

Here, we also present our estimated P&L and cash breakeven levels for the last 3 quarters of 2026. Our PLM breakeven for the period is estimated at $29,700 per day, while our cash breakeven is estimated at $23,400 per day, which reflects all through cash costs.

The difference between our P&L and cash breakeven is estimated at $6,300 per day for the last 3 quarters. This discretionary cash flow will remain within the company and be allocated for general corporate purposes.

On this slide, we present an update on bookings to date for the second quarter of 2026. We expect 997 time charter days covered for the second quarter at an average rate of $73,900 per day. This rate includes profit sharing for the month of April and the base rate only for the months of May and June for contracts with profit sharing structures.

We also anticipate 1,025 spot days for the quarter, of which 88% have already been booked at an average rate of $168,300 per day. The spot P&L breakeven for the quarter is estimated to be less than zero as the time charter earnings are expected to exceed forecasted costs.

Turning to our 2026 dry dock schedule. As shown on this slide, we have seven vessels scheduled for dry docking during 2026. DHT Lion completed its second special survey in dry dock in the first quarter, and this was completed on time and within expectations.

Looking at the remainder of the program, four vessels, DHT Osprey, DHT Panther, DHT Puma and DHT Harrier are scheduled for their second special survey in dry dock.

In addition, DHT Amazon and DHT Redwood are scheduled for their third special survey in dry dock. Overall, the 2026 dry dock schedule is well planned, fully incorporated into our operating and capital expenditure outlook and does not change our underlying view on fleet availability or cash flow generation.

Importantly, this reflects our continued focus on maintaining a high-quality fleet while preserving operational reliability and asset value over the long term. And then I'll turn the call back to Svein.

Thank you, Laila. We will now spend some time on what we see as the current market pillars, the future catalysts and our strategic positioning. We will here start with the current market pillars. The VLCC market is, in our view, influenced by the following primary drivers.

First, the basic supply-demand fundamentals continue to support freight rates as evidenced during the second half of 2025 when the freight market strengthened without any special events taking place. Second, we experienced strategic fleet consolidation with the market structure having been strengthened by significant consolidation activity from a private aggregator during the first quarter of 2026.

This is a historical first and the fleet demographics and fragmented ownership made this truly possible. We don't see this effort as a fly by night and expect it to positively influence our market going forward.

Third, risk premiums driven by regional volatilities involving Iran have introduced significant risk premiums on certain trade routes, resulting in substantial earnings differences between the various trading routes. This is not a fundamental driver, but has alert to the entire industry to how vulnerable it is to curve balls.

Fourth, near-term loss in crude oil available for transportation from the Middle East Gulf is a risk. We believe, however, that this could be compensated by reduced vessel productivity through: one, increased transportation distances as refiners source barrels from further away; and two, approximately 10% of the VLCC fleet being tied up either with cargo waiting to exit the Gulf or waiting to load from Saudi Arabia's Western export facility.

For the sake of good order, we have no ships inside the Gulf when the conflict broke out. We have no ships inside currently, and our fleet is fully operational.

Now let's discuss the future catalysts. We believe several emerging trends warrant specific attention as they are expected to provide longer-term tailwinds for the large tanker market and our operations.

Sanction relief and trade normalization. Assuming conflicts will be resolved, potential sanctions relief on Venezuelan and Iranian crude exports would likely shift volumes from the shadow fleet to compliant operators, thereby expanding the addressable market for our vessels.

Fleet modernization and demolition. We anticipate that the shift toward compliant trade will deprive the aging non-compliant shadow fleet of employment, likely accelerating the retirement of substandard tonnage and further tightening global vessel supply.

These two teams in combination could shrink the working fleet by 10%, maybe 15% of capacity. Energy security and inventory replenishment, a heightened focus on national energy security could trigger long-term crude oil inventory building, supporting transportation demand beyond immediate consumption needs.

This team will likely change customer behavior from just in time to just in case. And finally, what is DHT's strategic positioning. Consistent with the outlook presented in our previous reports, we observed that end users are increasingly seeking to secure vessel capacity in response to tightening market conditions.

As you will have noted, we positioned our fleet for the first half of the year to seize on this development, capturing spot market rewards while selectively securing term employment to reduce volatility and enhance earnings visibility.

The delivery of our four VLCC newbuildings this year is proving well timed with one vessel already commencing a long-term charter with a key customer. Our disciplined capital allocation policy remains a priority, ensuring that the positive market development and our positioning will reward shareholders through quarterly cash dividends equal to 100% of ordinary net income. And with that, we open up for questions.Operator?

[Operator Instructions] Our first question comes from the line of John Chappell from Evercore.

So, starting with that last slide on strategic options, a quick 2-parter. Obviously, you signed a lot of contracts at rates that no one could blame you for. Could you just help with the Gazelle rate? It's the one that wasn't disclosed in the press release and can help with transparency.

And two, I know you like to keep some spot market exposure, keeps you in the conversation, helps you understand flows. even though the rates are still somewhat elevated and generating fantastic returns. Do you think for the most part, you'd like to keep the remainder of the fleet in the spot you see in the information flow?

Thank you, John. As for your first question on the rate on vessel, that is the explicit agreement with the customer not to disclose the rate. So we are not at liberty to do that. I apologize for that.

Secondly, for this year, we are now sort of closing in on 50% cover on time charter. Keep in mind that two of those ships have base rate with profit sharing elements on top with no ceilings.

So they are partly taking part in the spot market. When it comes to adding term business, we are quite content for now, and we might revisit this sort of later on. But as of this moment, we are very satisfied with the general positioning of the company and the opportunities we see ahead.

Okay. Great. And then for a follow-up, just kind of understanding the operational challenges and opportunities since your last conference call. Obviously, we're seeing these headline rates that are eye-watering, but they're very inconsistent depending on where the source is.

When we see a headline rate, do we assume that, that's something that DHT can achieve? Or do we have to take into account maybe some theoretical elements of that? Is there more waiting time or ballast time as you're moving the fleet around to areas that are maybe safer for the crew and also taking into account bunker fuels.

Just trying to understand when we see a number, is that a number that you can really get? Or is there a lot of different elements in it that maybe it's not quite the headline rate?

Yes. So the most referred to index and route has been what is called TD3C which is cargo loaded in Saudi Arabia and discharged in China. Obviously, that route has not really been operational in general terms of the market with some exceptions, obviously, as many shipowners were not entertaining to enter the person Gulf.

So it has been produced a derivative pricing on two other sort of load ports in the region, one being Yandu, which is in the Red Sea, i.e., the Western load ports of Saudi Arabia.

And secondly, Fujairah, which is outside of the strait of Hormuz, which is in the UAE. So those pricings have been below the TD3C, but certainly related to that there's many similarities to the trade.

But I think it's fair to say that there's a limited number of ships that have captured what the TD3C index has referred in the market. That's just the nature of how the game has been played in the last few weeks.

So on our part, we managed to keep our fleet efficient without any operational disruptions. We have not taken on any excessive ballast or cost or expenditure to keep our fleet going.

We're trying to -- as good as we can to be sort of ahead of the game a bit. We've done a fair amount of business from the Atlantic, where we also have a big COA with export of oil from the Atlantic Basin to Asia. So that has sort of occupied also a few ships. So on our part, we haven't really been impaired on our earnings, if I can say it that way.

Our next question comes from the line of Sherif Elmaghrabi from BTIG.

Starting with the fleet, your fleet, the sale of your oldest vessels lines up pretty nicely with the delivery of newbuilds this year. So looking ahead, I'm curious how you're thinking about continued fleet growth. It seems like there's a fair amount of on the water opportunity, but maybe that tonnage skews older.

Yes. So we are very happy with the fleet that we have, and there are no ships in our fleet that are planned for divestments. We have a balance sheet that is sort of able to entertain fleet growth. So we're always on the lookout for opportunities.

Right now, that's been very hard to find, frankly. I wouldn't say because there's been other competing buyers for ships, but the competition has been a very healthy freight market.

So potential sellers have opted to retain their ships in their operation to earn money simply. But as I said, we would like to continue to build the DHT. So at some point, hopefully, there will be opportunities for us to invest in additional ships for the fleet.

Got it. And then second question, you talked about the risk premium from the war in Iran. Obviously, that -- hopefully, that ends sooner rather than later. But whenever it does, how quickly could we see activity return to the Gulf?

And -- more specifically, obviously, charters want you to go back as soon as possible. But what are some of the puts and takes there that you have to consider things like mariner risk or insurance coverage, stuff like that?

I think we need to see a high level of credibility to a resolution to the conflict and that we can expect whatever agreements that will be put in place will have -- they can last because in all fairness, the news flow over these last 2 weeks have been rather volatile with good news, bad news almost trading each other every second day.

So we cannot sort of react, I think, to good news one day and assume we can all sort of enter in the second day and the market sort of goes back to normal. And I don't think we will be alone in consider the situation like that.

So credibility to sort of a solution has to be in place. And I think that, that will take a bit longer than just a few more days, right? So I think the key action we need to see now, of course, is that all these ships that are trapped inside the Gulf that they can exit safely.

That will take a while. We believe there are some 57 VLCCs inside the Gulf with cargo that is waiting to exit, plus there are a lot of other ship types and not only tankers, but also inside that are waiting to sort of resume operations. So I guess a lot of this has to be unwind, if you like, for -- to demonstrate that the passage to the strait is safe.

And our next question comes from the line of Omar Nokta from Clarksons.

Maybe just a follow-up a little bit on kind of the discussion points of Hormuz and risk premiums. Are you able to talk a little bit about how, from your perspective, the risk premium across the different routes for getting inside Hormuz since that's not really transacting. But outside of that, you mentioned Yanbu, Fujaira.

Can you just talk a bit about how that risk premium has developed as this crisis has gone on and then also your willingness to transact in those areas?

Yes. So firstly, to entertain trades inside the strait of Hormuz was a non-starter for us. We think it's also a very easy decision. We have 25 on average on our employees on board the ships and to expose them to trades like this is not something we are willing to discuss.

So secondly, I think initially, Yanbu, Fujairah also had at least some academic risks to these areas. As people have gotten a bit more comfortable with these areas, those freights have sort of moved differently from where sort of the person Gulf freight potentially could be.

So it's now closing in to be sort of more aligned with what Atlantic trades are offering. So now -- as of now, there's not a really big delta between this. There could be some positional issues and stuff like that. But I see there's some more normalization in pricing in those two routes, i.e., Fujairah and Yanbu compared to the rest of the markets.

Okay. And then how do you think, I guess, about in a reopening scenario, and let's say, things go back to normal, which clearly seemingly that seems difficult to anticipate. But just how do you think about the permanence of these new routes or at least these routes have gotten a bit more active? Do you think these are here to stay? And what do you kind of think about how that affects this market long term?

Yanbu in the Red Sea has the capacity to sort of super efficient operation, about 4 million barrels a day, so they can load 2Vs a day. That is not a new trade. That terminal has been there for many years, have been serving certain markets, maybe not to its full capacity though.

So I think whether that route is keeping that capacity or whether some of that cargo shifted back to the Gulf doesn't really impact the general efficiency of the market because it's a very similar type of duration for those voyages.

When it comes to Fujairah, I think in the near term, it's a bit hard to say. But what we would be curious to see how UAE's exit from OPEC will sort of unfold. I think they have had ambitions for quite some time to increase their quotas. And as they now become free from OPEC, they will, of course, also be free to decide how much they will produce.

And whether that will go out of Fujairah only or also from the ports inside, we don't know yet exactly the ratios and how that will play out. But -- but I think we should expect there to be more cargo in the water in general. And maybe that will have a downward pressure on oil price, but which will stimulate our business in general.

The next question comes from the line of Geoffrey Scott from Scott Asset Management.

I have a question about the couple of ships that are on long-term charter with profit sharing. I've always thought that the 50-50 break for profit sharing was a very fair division of kind of risk and reward for the long-term chartering market. But it requires some estimate of what that profit sharing is. How do you get to the profit sharing number?

Index?

Thank you for asking. So we don't disclose the details of these contracts. But the profit sharing mechanism is calculated on our ships particular specification for fuel consumption and efficiency, all of that.

And it is the index-based profit calculation. So one charter has only one index as sort of at the pricing base and the other one has a mix -- so -- but none of these contracts are frustrated in any way by the call it, changes we have seen recently. And we also noted that there somebody now trying to pursue Baltic legally. -- whether that is -- whether that case has a probability of going one or the other way, I don't know.

But again, the basis, which is the price mechanism in our charters are operational, and we get paid by our customer, and there's no frustration in these systems.

There is no conflict in that conversation.

No.

There are no further questions at this time. So I'll hand the call back to Svein for closing remarks.

Thank you very much to all for being interested in DHT, and wishing you all a good day ahead. Thank you.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.

Good day, and thank you for standing by. Welcome to the Q4 2025 DHT Holdings, Inc. Earnings Conference Call. [Operator Instructions] Please be advised today's conference is being recorded. I'd now like to hand the conference over to your first speaker today, Laila Halvorsen, CFO. Please go ahead.

Thank you. Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings Fourth Quarter 2025 Earnings Call. I'm joined by DHT's President and CEO, Svein Moxnes Harfjeld.

As usual, we will go through financials and some highlights before we open up for your questions. The link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available on our website, dhtankers.com, until February 12. In addition, our earnings press release will be available on our website and on the SEC EDGAR system as an exhibit to our Form 6-K.

As a reminder, on this conference call, we will discuss matters that are forward-looking in nature. These forward-looking statements are based on our current expectations about future events as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements. We urge you to read our periodic report available on our website and on the SEC EDGAR system, including the risk factors in these reports for more information regarding risks that we face.

As usual, we will start the presentation with some financial highlights. In the fourth quarter of 2025, we achieved revenues on TCE basis of $118 million and adjusted EBITDA of $95 million. Net income came in at $66 million, equal to $0.41 per share. Vessel operating expenses for the quarter were $17.1 million, and G&A for the quarter was $5.6 million, which included approximately $0.6 million in nonrecurring project costs. In terms of market performance, our vessels trading in the spot market earned an average of $69,500 per day, while the vessels on time-charters achieved $49,400 per day. The average combined TCE for the fleet in the quarter was $60,300 per day.

For the full year of 2025, we achieved revenues on TCE basis of $369 million and adjusted EBITDA of $278 million. Net income for 2025 was $211 million, equal to $1.31 per share. Adjusted for the gains related to sale of vessels, adjusted net income was $158 million, equal to $0.99 per share, marking another strong year for DHT. We have a rock solid balance sheet with low leverage and strong liquidity. At the end of the fourth quarter, total liquidity was $189 million, consisting of $79 million in cash and $110.5 million available under 2 of our revolving credit facilities.

In December, we drew on this RCF capacity to fund the final installment for our first newbuilding, which was delivered on January 2. This drawdown was repaid in January when we drew on the newbuilding facility. Following these transactions, current availability under our RCF stands at $171.9 million. At quarter end, financial leverage was 17.6% based on market values for the fleet and net debt was just under $16 million per vessel, which is well below estimated residual values.

Looking at our cash flow, we began the quarter with -- sorry, $81 million in cash. From operations, we generated $95.3 million in EBITDA. Ordinary debt repayment and cash interest totaled $13.2 million and $28.9 million was distributed to shareholders through a cash dividend. $97.6 million was deployed towards vessels during the quarter, which included the delivery of DHT Nokota, our 2018 built secondhand acquisition. We also issued $169.4 million in long-term debt associated with the delivery of DHT Nokota and the delivery of our first newbuilding DHT Antelope.

In addition, we invested $107.8 million in our newbuilding program. Changes in working capital and other items amounted to $19.3 million, and the quarter ended with $79 million in cash.

With that, I will turn the call over to Svein.

Thank you, Laila. I will now go through our quarterly highlights. We entered into an agreement in June last year to acquire a large quality VLCC built in 2018 at Hyundai. We took delivery of the vessel in November and excellent timing as the freight market was roaring. She is named DHT Nokota and trades in the spot market. As we have alluded to in numerous communications, our plan has been to divest our 3 older ships built in 2007.

One of the considerations was timely fleet modernization, selling the oldest vessels in a strong market and replace these vessels with our newbuilding program of 4 new vessels entering our fleet during the first half of this year. This newbuilding program was contracted some 2 years ago when the order book was about 2% of total capacity. We entered into agreement to sell DHT China and DHT Europe during the quarter for a combined price of $101.6 million.

The Europe was delivered the last day of January, and we expect to deliver the DHT China later this quarter. We expect to book a combined gain of about $60 million during the first quarter. Cash proceeds should come in about $95 million. The following events took place subsequently to the quarter end. We took delivery of the first of our 4 newbuildings on January 2. She is named DHT Antelope, setting the tone for this new series called the Antelope Class.

She is demonstrating excellent fuel economics during her maiden voyage, so far exceeding our expectations. The remaining 3 ships will deliver with 2 in March and 1 in June. This is a fully funded project and no new shares will be issued in this connection. We extended the time-charter for DHT Harrier with a 5-year contract at $47,500 per day. The new rate commenced at the end of January. The customer has the option to extend for 2 individual additional years at $49,000 and $50,000, respectively.

Lastly, we entered into agreement to sell the DHT Bauhinia, our last vessel built in 2007. The price is $51.5 million and the vessel is debt-free. We expect to deliver her to our new owners in June, July this year and expect to record a gain of $34.2 million from the sale. Back to you, Laila.

Thank you. In line with our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividend, the Board has approved a dividend of $0.41 per share for the fourth quarter of 2025. This marks our 64th consecutive quarterly cash dividend. The shares will trade ex dividend on February 19, and the dividend will be paid on February 26 to shareholders of record as of February 19.

On the left side of the slide, we present our estimated P&L and cash breakeven levels for 2026. Our spot cash breakeven for the year is estimated at $17,500 per day, which reflects the sale of our 3 oldest vessels and 7 special surveys scheduled during the year. This figure captures all true cash costs. The difference between our P&L and cash breakeven is estimated at $6,700 per day, totaling about $56 million for this year. This discretionary cash flow will remain within the company and be allocated for general corporate purposes.

On the right side of the slide, we illustrate the accumulated dividends since we updated our capital allocation policy in the third quarter of 2022. The total accumulated amount is $3.34 per share, reflecting strong shareholder returns during a period of share price appreciation.

Finally, an update on bookings to date for the first quarter of 2026. We expect 797 time-charter days covered for the first quarter at an average rate of $43,300 per day. This rate includes profit sharing for the month of January and the base rate only for the month of February and March for contracts with profit sharing feature. We anticipate 1,195 spot days for the quarter, of which 76% have already been booked at an average rate of $78,900 per day. The spot P&L breakeven for the quarter is estimated to be $18,300 per day. And then I'll turn the call back to Svein.

We have repeatedly addressed the fleet demographics and how it creates an important and robust pillar in our constructive market outlook. We estimate the current sailing VLCC fleet to count 897 ships, net of ships engaged in permanent floating storage. Of this fleet, 427 ships or 46% of the fleet will be older than 15 years by the end of this year.

Similarly, 199 ships or 20% of the fleet will be older than 20 years. And extraordinarily, 49 ships equal to just over 5% of the fleet will be older than 25 years. The sanctioned VLCC fleet counts 151 vessels, of which 105 are older than 20. 22 of the sanctioned ships that are younger than 20 are owned by NITC, the Iranian state-owned shipping line. There are discussions as to whether the sanctioned fleet can reenter the compliant market. At first, we would state that say for some very minor exceptions, there are hardly any commercial opportunities once the VLCC passes the 20-year mark in the compliant market. This is different for smaller ship classes with the general rule being that retirement age of ships gets older as ship sizes get smaller.

A key message about the VLCC fleet. If and when the sanctioned oil markets become compliant, this could eventually make the sanctioned fleet redundant. Further, there are discussions whether the order book is growing into oversupply territory. We would argue no. The reasons are illustrated here with a confirmed order book of 171 ships delivering over the next 3 years. There are some discussions at letter of intent stages, which will likely add some additional orders for the very end of '28, but mostly in 2029.

Delivery slots for new VLCCs on offer now are in 2029, hence, the 3-year delivery time will unlikely change. Fast forward to the end of 2029 and assuming no scrapping, we will have 528 VLCCs older than 15 and 303 older than 20. These numbers should be put in perspective with the order book. In short, we believe the supply squeeze to be real. As you may have read in the news, a fundamental shift in the fleet ownership is taking place with fleet consolidation by private actors gaining meaningful traction. We can say with confidence that this is taking place and already making an impact, both on freight rates in the spot market, customer demand for time-charters and values of secondhand VLCCs.

We estimate that the aggregators to have gained control of some 120 ships, and we expect their efforts to continue and not too long to control at least 25% of the compliant tramping VLCC fleet, a critical market share. This consolidation is shifting the pricing dynamics and is putting pressure on timely availability of ships. As end users increasingly are taking note of this trend, we see rising interest from customers seeking to secure reliability, a reliability that increasingly will command a premium.

As crude oil is a feedstock business, one should not expect this consolidation to be trade prohibitive. Crude oil transportation is cheap when measured as a portion of the delivered value of the cargo and slightly disappearing in the oil price. As a reflection of the constructive market view we have held for some time, we are increasing our spot market exposure for our fleet by reducing fixed income contracts, i.e., time-charters. Further, we believe the delivery of our 4 state-of-the-art VLCC newbuildings during the first half of this year to be very timely. You will note on this slide that we expect our spot market exposure to reach some 3/4 of our capacity during the second quarter. This enables us not only to participate in the rewarding spot markets to a greater extent than for some time, but also in due course, develop new time-charter contracts at improved rates.

As we enter 2026, the VLCC market is undergoing a structural transformation. We are navigating a perfect storm of strong demand, geopolitical volatility, a rapidly aging global fleet and significant consolidation of the compliant tramping fleet. At DHT, we are not just observers of this cycle. We are well positioned to benefit from it. We have an excellent fleet in the water and execute a timely renewal with state-of-the-art VLCC newbuildings delivering into a strong market, financed without issuing a single share. We have increasing market exposure and a clear mandate to return earnings to our shareholders.

We look forward to an exciting and rewarding 2026. And with that, we open up for questions. Operator?

[Operator Instructions] We will now take the first question. And this is from the line of John Chappell from Evercore ISI.

Svein, putting Slides 11 and 12 together, the commentary about the consolidation and then you're increasing spot exposure to 74%. The comment on the aggregator and charters looking for reliability and the premium associated with that. When I first read that in the press release last night, it sounded like that was conducive to a much stronger time-charter market. And we saw one of your Norwegian peers sign 8 ships at absurd time-charter numbers, lacking a better term. So can you help us kind of reconcile those? Do you think that there's going to be other opportunities like that even better than what you just renew the Harrier at. So that spot market exposure increase may be kind of short term?

I can confirm that. So I would say, basically, all end users or customers now are in the market to secure time-charters and for a variety of tenors, mostly 1, 2 or 3 years. And the rates that they are being offered are above last bump. And the aggregator, so to speak, is not really in the market to offer ships for time-charter, at least not as we have seen and we doubt that it is happening. So it's really the remainder of owners that potentially will consider this. And I think today, there are rumors of a 1-year charter at $85,000 a day. So we'll have to see if that happens. But that, I think, is on subs apparently. So that's a reflection of a step-up from the last one on 1 year.

And also, we are aware of customers bidding on 3-year charters, certainly at numbers quite above what you would assume to be last on. So I think in general, customers are a bit worried about reliability and not really having access to ships or potentially be held hostage to a market where ships are being held back for some reason, right? So it's a very interesting dynamic, and it's already sort of taking shape. So we already see the contours of how this is working out.

Okay. And then just you've done a deep dive on the supply side, so there's no reason to really rehash that. But the commentary on the last slide about demand, it looks like global oil demand growth is kind of stabilizing around 1% and there's a lot of talk about the market becoming oversupplied with OPEC production at the current levels and China really being the only kind of incremental buyer. Is that demand commentary more about ton-mile demand, more about disruption, sanctioned vessels, new trade routes? Or is it really more of a commentary on just an underlying robust consumption?

I think it's a bit how numbers are presented and how they're analyzed. So when the 1% figure is referred to, that's a number over total liquids, i.e., roughly 83 million barrels a day of crude and remaining being sort of liquids, taking that number to, call it, 103 million. The reality is that seaborne crude oil transportation is today roughly around 41 million barrels a day. And the additional 1 million barrels of crude oil coming to the market is now basically all of it will be seaborne. So you have to look at that number over 41 million barrels, not over 103 million barrels. And if you do that, that's roughly a 2.5% demand growth, right?

And then, of course, it's the play of distances, as you alluded to. Of course, Middle East now having more oil in the market is not as long transportation distances as some of the Atlantic crude. So you see now the U.S. production this year is probably, I would say, a bit sideways, but from conversations, understanding of some of the majors and consolidation in the U.S. They are bringing efficiency and cost down, which means they will also likely expand production. Guyana, of course, is growing quite fast, and we expect also Brazil to grow quite meaningfully this year.

So I think all this combined, we have reasons to be positive on the demand side growth as well. So -- but I think the details really is understanding these numbers, the total liquids demand versus the seaborne demand of crude oil.

We'll now take our next question. This is from Frode Morkedal from Clarksons.

On this aggregators controlling 25%, can you maybe translate that into a vessel count or maybe clarify how you define the compliance fleet? Because when I look at 130, 120 ships, that's just like probably 18% or something like that. So just a clarification on that first.

Yes. So you have to knock off the sanction fleet, obviously, right, which is not really a market business. Then, there are quite significant number of ships that are state-owned controlled and that are really just running a shuttle service, basically a taxi service for their owners. So China Inc. for one, they control roughly 100 VLCCs, and quite a significant portion of that fleet is engaged in transporting oil as a cargo services from -- mainly from the Middle East for Chinese refiners.

Saudi Arabia owns a big fleet. Japan Inc. owns a big fleet. So these ships are not really tramping and are open in the market all the time. Some of them might be because of scheduling issues that are free of cargo and being replaced and stuff like that. But you don't see all of those fleets in the regular spot market.

So when you adjust that, I think a reasonable number is to think that the fleet is somewhere maybe 600 ships, maybe a little bit smaller even. So that's why we sort of take the risk at presenting that number. I don't think it's unreasonable to think that the 25% of the compliant tramping fleet are the one that going to be sort of exposed to this consolidation.

Okay. Understood. So you're not really saying that they will add even more ships to reach 25%. They already have that.

We understand in the market that they are looking to acquire additional ships. And as a company with ships, chances are maybe we also get the old phone call if you want to sell ships, and we're done selling. So I think ambitions are certainly there to do more. So let's see where it ends up.

Interesting. On that note, I guess I have 2 questions on that. First, is 25% enough to meaningfully, let's say, shift the market dynamics? And how so? What mechanism will it be?

I think so. I think because if you look at the types of ships that are being acquired, they're predominantly in the 10- to 15-year age bracket. And most of those ships that are being sold have been owned by owners with maybe 2, 3, 4, 5 ships. And they have occasionally a little bit different behavior in the spot market. So to -- if the -- if these aggregators are sort of getting all those ships under some sort of commercial umbrella, you will have, I think, a different pricing behavior and a different flow information, importantly to the people around, right?

So if you are a big operator like DHT and some of our peers, you basically have ships in the market all the time, and you have very good information flow and you get access to pretty much all the business. But if you own 2, 3 ships, there could be quite meaningful time between every time you fix, you might not always have a full flow of information, although I don't need to be disrespective of these owners, but to be in the market all the time has a benefit, right? So I think the dynamic is certainly going to change because of this.

That's very interesting. Last question I had is basically on the same topic because this company we're discussing has clearly been a willing buyer, right? And many owners, shipowners have been willing sellers and ship values have moved higher. I guess you basically said that they will probably buy more ships, right? But one of the question I often get from investors is that are there further bringing buyers at current levels, right? And how do you see vessel values being maintained at these lofty levels, to be honest?

They are not the only buyer. So there are other buyers for ships in the sort of the older spectrum, I would say, ships predominantly built before 2010, '11. So there are still buyers there at sort of levels we just have sold our older ships at. There's also been, I would say, more than a handful of transactions on modern secondhand plus/minus 5 years of age. And all of those transactions were bid up on price, and there were competition, right?

So there's very few modern ships to buy and some buyers have been willing to set a new market to get those ships. And those -- and these are credible buyers, right? And I don't think they are the only buyer in the market. So in general, people are very bullish, and I understand why. So I wouldn't say it's sort of the end of the buying period just yet.

That's good to hear. And I guess current time-charter rates basically justify those ship values, right? So that's good.

Great. There you go.

And the next question today comes from the line of Greg Lewis, BTIG.

I did want to talk a little bit more about the consolidator and kind of tie it into your fleet. At least what we've seen and correct me if I'm wrong, it seems like their focus has been on some more of the older age vessels in the fleet, the 15 -- definitely the 10-plus, but even in some cases, 15-plus year-old vessels. I guess what -- I guess I'm curious, have they -- have they been looking at any more modern or younger tonnage that maybe we just haven't seen? And then tying it into your fleet, yes, obviously, you announced that we got rid of that last 2007 vessel. But at this point, we already -- I mean, time flies when you're having fun. And I guess at this point, we are starting to have 15 -- some more 15-year-old vessels just because time goes by in the fleet. And just kind of curious how you're thinking about some of those vessels that are just in that 15-plus year range now in your fleet?

So we are done selling for now. So these -- we have 5 ships that are built in 2011, 2012. They're fantastic ships, large deadweight, excellent fuel economics, very, very good condition, and they serviced both us and our customers very well, and they are earning top dollars in the market. So they're not going anywhere but staying in the DHT fleet.

Okay. And then has the consolidator been looking at more modern tonnage, i.e., because I guess what I'm trying to figure out is you bought the 2018 vessel not too long ago. Like how much -- like is this new consolidator -- I mean, I guess we don't want to talk about their name, but have they been -- are they looking -- are we seeing them bid into that more modern 7 and younger fleet?

Yes, I think so, although I don't know for a fact, but I think so. So -- but for me, it's also been quite rational in the way they've approached to sort of the age bracket, call it, 10 to 15. I'm not assuming they're religious about it. But -- so the cash return on those investments, if you can do what it seems that they are setting out to do, will be significant, right? So it's a sort of good start in their play and their strategy. I would think sitting from -- on the sideline, we have a different approach because we are truly in the long term, servicing some quite demanding customers, and we need to also renew some of our equipment and do that timely and stuff like that. So for me, it's sort of logical what they are doing.

Okay. Yes. Just maybe just because it's a private company and they're able to do things differently. And I did have a question about the broader market and realizing it's kind of only been a couple of weeks, and it's a work in progress. But just given what's happened in Venezuela earlier this year, have we started to see signs of that impacting, i.e., crude flow replacements that were previously from Venezuela coming elsewhere? And kind of curious how you see that playing out, just assuming that all that Venezuelan crude that had been heading, I guess, primarily to Asia, if that kind of has to deviate maybe more to the U.S.

Yes. So it's early days, right? But I think that the barrels that are going to move now initially will -- from what I read, will predominantly go to the U.S. But there are some dynamics there. One of the biggest creditors in Venezuela is China. And that sort of financing that they have provided in the past is supposed to be repaid in oil. So if they're going to sort of settle the debt, so to speak, with bonds and all these things and get that sorted, I would guess China would want their hands on some of that oil. And we have seen now read that Trafigura and Vitol are being engaged as traders or marketers of this oil. And I think we should expect that some of this will be placed in Asia.

The key now, of course, is that how quickly can they ramp up production. I think the sort of lighter products that they have, which are offshore is probably easier to get going than some of the heavier stuff in the Orinoco Delta and bitumen and oil emulsion and stuff like that, and whether they're going to be able to blend into the sort of -- I think it's called the major grade.

So this will probably take a bit longer time. But of course, they have vast resources, right? And it will be great for the country if they can get this or get traction on this capital invested and get the production up. So I just think this is going to be good for the markets, absolutely.

And just to that point, right, you mentioned Trafi, and I believe Vitol stepping in to kind of move some of that oil out of Venezuela, I guess, not historically, but at least the last couple of years, it's been moved on shadow fleet. Is there a process to those entities bringing online companies like DHT, hey, DHT, realizing that Venezuela has not been a place you've been going to before. Is there like a process in getting companies like you on board so that we're able to move this oil on, I guess, the mainstream fleet?

It has to be. But I think it's fair to assume here that say it's Trafigura and Vitol that will sell this oil, they will hold the title of that oil, right? So they will be our customer. And of course, it has to be clear that there's no OFAC risk for a company like DHT in moving that oil. So we haven't seen any of this yet, but I think everybody sort of expect and understand that, that has to be resolved in a proper fashion.

[Operator Instructions] We will now take our next question. And this is from Eirik Haavaldsen from Pareto.

I just wanted to ask you on your balance sheet because, of course, with the cash flows you're now generating and with the vessel sales you've announced, you're quickly getting back to even after all these investments or the investments you made now in newbuilds and Nokota, I mean, you're getting down to a level below scrap very quickly. So what's your thinking there? What's the ideal level of debt? Because on an LTV basis, I think you're down to levels you haven't really been at before?

I think it's important to make a distinction between book -- debt to book and debt to market value. So market values now, of course, have been going up. So then that leverage is sort of in the teens, as Laila spoke about earlier. To book, it's about 26.5% or thereabouts. I think over time, ideally, we want to continue to invest and grow the business. Right now, it's a bit hard to find meaningful investments. But to have that capacity in the balance sheet and do this organically and not being sort of reliant on printing new shares has been important target for us.

I think secondly, our dividend policy, also an important pillar in structuring that is that there is a meaningful delta between P&L and cash breakeven because you always need some cash being retained in the company for other purposes than paying out dividends. And if you start to lever up too much with the lack of a better word, then you close that delta, which means you will have basically no cash flow left in the company or little -- very little.

So that's not an ideal scenario. So it's not -- I cannot sort of give you or guide you on a specific percentage or a magic number. But these are sort of general things that we think about when we do this. We looked at some secondhand opportunities sort of end of last year, but prices run away from us. So we didn't do anything, obviously. But that stuff we have capacity to do to pick up a couple of modern ships without any new capital. So we want to have that capacity.

I mean there's been a lot of talk, obviously, on this call as well about this consolidated pushing values higher. But I guess another thing is also shipyards and newbuild prices and weaker dollar and backlogs that are increasing and so on. So where do you see newbuild prices headed over the next year? And I guess also with regards to your fleet because you cleared out now all the Chinese-built vessels. Are Chinese vessels or I guess, vessels under construction in China of interest to you? Or will you now have a sole Korea focus, which I guess can be valuable over time?

We have nothing in principle against ships build the Chinese shipyard. We have potentially maybe a couple of yards that we prefer a rate or rank above maybe some others that have less experience in building ships. I think importantly now, this USTR issue between U.S. and China that postponed until November. So we'd like to see some clarity on that before we make sort of final decisions on this.

But a significant portion, probably 70% now of the order book for these are in China. And I think it's going to be hard to just disregard it. So it's just a question of how we can potentially approach that going forward. But I think nothing is going to happen on our side just now. We have to wait a little bit.

But the [indiscernible] vessel now delivering, I guess, first half '29, what would the price be?

I think plus/minus $130. One yard is just below, yard is just above. So -- and it's far out, right? So I think to sort of deploy capital now that will not work is the challenge, right? So, of course, we have some RCF capacity we can repay and save some interest expense, things like that. So it's just a question of making all this sort of work sufficiently, but at the same time, also sensibly for the company. So maybe there will be some reset opportunities at attractive price at some point. Right now, I would think chances are no, but that can change, right?.

At least the earnings are too high, I guess it's a good problem to have.

[Operator Instructions] We will now take our next question. This is from Geoffrey Scott from Scott Asset Management.

Has there been any resolution of protocols for demolition of the noncompliant fleet?

That's a good question. So we understand now that one of the 2 largest sort of cash buyers in the demolition market is now seeking to get approvals, especially now from the U.S. and OFAC to transact then with counterparties that have been sanctioned in order to acquire these ships and get them demolished.

So I don't really have an update as of today what the status is. But I think it makes a lot of sense for everyone to get that resolved and get that activity going because we have some of these ships now that are very old and in the shadow fleet that are losing out on work because conditions or maybe some crew don't want to work on them and things like that. And so they will have to go. And I think this will happen. And I think it's good news that at least one of those cash buyers are pursuing this. I would suspect that maybe the other big one is doing maybe something similar, although I haven't heard the name specifically, but I would guess that they will be looking into the same, so we can get that activity going.

Do you think this will get resolved sooner rather than later?

Yes. I wish I could be more specific. I don't know. And I don't know the process with, I guess, OFAC and how it will work and what sort of political support you need or whether it's a technocratic decision. I don't know the process. So I'm sorry, I can't give you a better guidance. But I think we take some encouragement that there is a process that has started.

[Operator Instructions] There are no further questions coming through, sir. So I will now hand back to you for any closing comments. Thank you.

Well, thank you to all for listening in on DHT, and we appreciate your interest and support and wish you all a great day ahead. Thank you.

Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.

Good day, and thank you for standing by. Welcome to the Q3 2025 DHT Holdings, Inc. Earnings Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, Laila Halverson, CFO. Please go ahead.

Thank you. Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings third quarter 2025 earnings call. I'm joined by DHT's President and CEO, Svein Moxnes Harfjeld. As usual, we will go through financials and some highlights before we open up for your questions.

The link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available on our website, dhtankers.com, until November 6. In addition, our earnings press release will be available on our website and on the SEC EDGAR system as an exhibit to our Form 6-K.

As a reminder, on this conference call, we will discuss matters that are forward-looking in nature. These forward-looking statements are based on our current expectations about future events as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements. We urge you to read our periodic reports available on our website and on the SEC EDGAR system, including the risk factors in these reports for more information regarding risks that we face.

As usual, we will start the presentation with some financial highlights. In the third quarter of 2025, we achieved revenues on TCE basis of $79.1 million and adjusted EBITDA of $57.7 million. Net income came in at $44.8 million, equal to $0.28 per share. After adjusting for the $15.7 million gain on sale of vessel related to the sale of DHT Peony and the noncash fair value loss related to interest rate derivatives of $0.4 million, the company had a net profit for the quarter of $29.5 million, equal to $0.18 per share.

Vessel operating expenses for the quarter were $18.4 million and G&A for the quarter was $4.1 million. For the third quarter, the average TCE for the vessels in the spot market was $38,700 per day. The vessels on time charters made $42,800 per day, while the average combined TCE achieved for the quarter was $40,500 per day. DHT has a robust balance sheet with low leverage and significant liquidity. The third quarter ended with total liquidity of $298 million, consisting of $81.2 million in cash and $216.5 million available under 2 of our revolving credit facilities. At quarter end, financial leverage was 12.4% based on market values for the ships and net debt was just below $9 million per vessel, which is well below estimated residual ship values.

Looking at our cash flow for the quarter, we began with $82.7 million in cash, and we generated $57.7 million in EBITDA. Ordinary debt repayment and cash interest amounted to $17 million and $38.6 million was allocated to shareholders through a cash dividend. Maintenance CapEx amounted to $1.6 million, and we invested $26.2 million in our newbuilding program. Additionally, we placed a $10.7 million deposit for the acquisition of DHT Nakota. The sale of DHT Peony generated proceeds of $51 million, and we used $22 million for prepayment of long-term debt. Positive changes in working capital and other items amounted to $6.8 million, and the quarter ended with $81.2 million in cash.

Now let's move on to our quarterly highlights. Many of these have already been communicated as subsequent events to the second quarter or as part of our recent business update. We entered into a $308.4 million secured credit facility to finance our 4 newbuildings. The facility is co-arranged by ING and Nordea with backing from K-Sure. It is competitively priced at SOFR plus a weighted average margin of 132 basis points. The facility has a true 12-year tenure and a 20-year repayment profile.

We have also entered into a credit facility with Nordea to finance the vessel acquisition announced in June. This is a $64 million reducing revolving credit facility with a 7-year tenure and a 20-year repayment profile. It is priced at SOFR plus a margin of 150 basis points, and it's consistent with our established financing approach. The vessel to be named DHT Nakota is built in 2018, and we hope to take delivery in a couple of weeks' time. In September, we made a $22.1 million prepayment under the Nordea credit facility covering all scheduled installments for the fourth quarter of 2025 and all of 2026. The facility matures in the first quarter of 2027 with only $3.7 million remaining, representing the final installment.

8 vessels serve as collateral for this facility with a current combined market value of about $650 million. During the quarter, we entered into 8 3-year amortizing interest rate swap agreements totaling $200.6 million. The average fixed interest rate is 3.32% compared to current 3-month term SOFR of 3.84% with maturity in the fourth quarter of 2028. As a subsequent event and as announced on October 13th, Svein Moxnes Harfjeld was appointed to the Board of Directors. He will, of course, continue to serve as President and CEO of the company.

And now over to capital allocation and dividend. In line with our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividend, the Board approved a dividend of $0.18 per share for the third quarter of 2025. This marks our 63rd consecutive quarterly cash dividend. The shares will trade ex-dividend on November 12, and the dividend will be paid on November 19th to shareholders of record as of November 12th.

On the left side of this slide, we now present our estimated P&L and cash breakeven levels for 2026. These figures include all true cash costs, and the difference between the 2 is estimated at $7,500 per day for next year. This discretionary cash flow will remain within the company and be allocated to general corporate purposes, primarily to fund the remaining installments under our newbuilding program. On the right side of the slide, we illustrate the accumulated dividend since we updated our capital allocation policy in the third quarter of 2022. The total accumulated amount is $2.93 per share, which reflects strong shareholder returns during a period of share price appreciation.

Finally, let me update you on the bookings to date for the fourth quarter of 2025. We expect to have 901 time charter days covered for the fourth quarter at $42,200 per day. This rate includes profit sharing for the month of October and the base rate only for the months of November and December for contracts with a profit-sharing future. We anticipate 1,070 spot days in this quarter, of which 68% have already been booked at an average rate of $64,900 per day. The spot P&L breakeven for the fourth quarter is estimated to be $15,200 per day.

And with that, I will turn the call over to Svein.

Thank you, Laila. As you all have likely noticed, the VLCC market is demonstrating significant strength. This strength should positively impact our earnings for the latter part of the fourth quarter. The current freight market strength is driven by growing demand for seaborne transportation of crude oil in combination with increasingly aging and fragmented structure of the fleet.

Importantly, for VLCCs, the workhorse of the crude oil transportation markets, they are regaining their market share, though it's most competitive freight offering and efficiency. Geopolitics, trade and tariff dynamics, sanctions and conflicts are adding to the picture, creating disruptions and focus on security of supply as the global fleet is reducing its efficiency and productivity.

The U.S.-China meeting in Kuala Lumpur agreed for a 1-year postponement on many issues, including the port fees. OPEC's decision to reduce spare capacity by reversing production cuts and bringing more crude oil to the market seems to be well absorbed, partly supported by the Chinese demand for both consumption and stockpiling.

Research suggests Chinese stockpiling to not only be short term and optimistic, but the longer-term need to fill its increased storage capacity and meet defined requirements for strategic storage. Further, it suggests the need to boost its oil security with concerns of interruption in supply from sanctions and potential regional political conflicts playing a part. Lastly, a diversification in foreign reserves by buying oil and gold is said to be a consideration.

Goldman Sachs reports that the world's biggest oil companies are expected to press ahead with plans to accelerate production growth when they report earnings. Analyst estimates compiled by Bloomberg suggests planned output growth between 3.9% and 4.7% to be in the cards. We have, as per usual, been traveling to spend time with our customers, and these reports mirror some of the key takeaways from our most recent trip. Several of our customers expect to expand their footprints and are presenting opportunities with demand for our services and more ships.

We are grateful for this encouraging support, which leaves us highly constructive on our franchise and future. As always, we are looking into opportunities to develop DHT with continuous improvements in our service offerings and possible expansion. We have what we believe to be a resilient strategy with a focus on solid customer relations, offering safe and reliable services, maintaining a competitive cost structure with robust breakeven levels, a strong balance sheet and a clear capital allocation policy. The whole DSC team continues to work hard and operate with leading governance standards and a high level of integrity.

And with that, we open up for questions. Operator?

[Operator Instructions] We will now take the first question coming from the line of Frode Morkedal from Clarksons Securities.

So on the port fees, that's interesting, suspended for a year. So I guess the question I had is like, is this a good thing for the market because I guess a lot of people had estimated some type of inefficiencies because of it, especially on the Chinese port fees, right? So maybe if things go back to normal, what's the impact on the market and maybe on your own positions?

So the jury, of course, is still out. But if I reflect on when the port fees were introduced, then the market typically took a time out, right? So you had a very quiet short period before people sort of got their heads around what was going on and then went on to continue fixing ships. Of course, some of that have maybe improved the sentiment a little bit, and you have some replacement jobs and all that with short notice that could drive up rates.

But as sort of the later period now, you would note that most of sort of the biggest shipowners, they are responding to the questionnaires that were presented by the Chinese authorities. including disclaimers on information and stuff like that. And I think it appeared that there was a relatively modest part or minor part of the fleet that were actually exposed to this and that would create sort of a true cost disruption.

So right now, of course, with the news again that this is being put on hold for a year, we will have a little time out, and then I think people will restart to fix ships again. So let's see how it plays out. But as we said on the prepared remarks here, we do believe that the strength in the market in general is because there is simply strong demand and fragmented and shrinking fleet. So -- but exactly how it translates into TC earnings is, of course, too early to say.

Yes. Clearly. I don't know if -- do you know if China still has this tariff on U.S. crude oil? I haven't seen any news on it.

Sorry, I didn't hear you.

China retaliated on having like a tariff on U.S. crude oil specifically, right? So you didn't -- the U.S. crude exports to China basically went away.

But U.S. crude oil export to China has been very, very modest, right? It's just a small portion of total exports. So -- and the big -- the 2 state-owned oil companies in China, they also use facilities outside China to store and transship oil and all of that. So -- but I guess this truth sort of includes everything, I would assume. So that's at least what the commercial secretary suggested after the meetings. So if there were any, I think that will probably be out of the equation as well. So I would guess so.

Yes. Interesting. I guess question with spot rates now clearly very high, how is the effect on the time charter side? Do you see levels improving or maybe duration is improving? Or is it still a bit too early?

I think you've seen increased interest and there are some shorter-term charters that have been done at sort of improved rates. But of course, with the delta on spot voyages and yesterday's time charter rates, it's very hard to put the right price on it.

And if you consider some of these long voyages that the VLCCs tend to perform, U.S. Gulf Far East cargo is 120 days. I mean the premium in the spot market will have a big impact on the balance earnings of a time charter and what would be required. So it's very hard to find a midpoint that sort of works for both parties. So I think, again, here, we will have to see a little bit. I would expect that if the firm market continues at sort of current levels for a while, then people will have to man up, so to say, and the bid-ask that will have to come in and in particular, on the customer side that they will have to pay up if they really want time charters.

Yes, makes sense. And I guess I would expect that you would consider adding time charter coverage if that happens, right? As we have stated many times, we like in general to have some level of fixed income. We have a number of time charters coming off now in the next few months.

So, there's an opportunity to reprice those charters, if you like, or maybe develop new charters with new customers for different ships. So if we can find a common ground on something that is meaningful, prefer a bit longer tender, we are open to that. And we are sort of in -- I wouldn't say negotiations that's overstating it, but in sort of preliminary discussions on what customers might be looking for in general. And -- but these things take quite a long time to develop. So one has to be patient.

[Operator Instructions] The next question comes from the line of Geoffrey Scott from Scott Asset Management.

There's always been a reluctance from the more respectable charters to take ships that are over 15 years old. In 2009, 2010, 2011, there were a lot of deliveries of these in those 3 years. They're coming up to or have just passed 15 years. As prices go up for charters, -- do you see any reduced reluctance of the major charters to take ships over 15 years? And is there any possibility that they'll actually go past 20 years to 21, 22, 22.5 in the next couple of years?

There's always been a bit of a dynamic in -- when it comes to acceptance of the age or the perceived age limit of ships on the market. So in the stronger market when the customer has less choice, they seem to be a bit more pragmatic. I think as a recent, most customers accept ships up to 17, 18 years of age. We have 3 ships built in 2007. They are all on time charters to significant counterparties. But I think beyond 20, then at least for our sort of profile and what we do, the commercial opportunities are limited. There are other owners that can find some pockets and trades where they can use these ships, but it's somewhat limited, I would say. So our commercial life expectation of ships are up to age 20, although the quality of our ships could operate well beyond that if the market had opportunities. It's not really for us.

But of course, the sanctioned trade have created a big market for older ships. I would think that, that market is somewhat satisfied now, and there are some people looking to even renewing that fleet by seeing if they can scrap ships that are 25 years or even older and then look to buy ships that are 17, 18, 19 years old to replace those ships that are 5, 6 years older. So it's a bit of a dynamic environment, and it's evolving rather than changing very abruptly, I would say.

There are no further questions at this time. I would now like to turn the conference back to Laila Halvorsen for closing remarks.

Okay. I'll step in for Laila and say thank you very much for attending the call and wishing you all a good day ahead. Thank you. Bye-bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.