DHT Holdings Inks Charters for 6 VLCCs

Crude oil tanker company DHT Holdings has secured time charters for six of its very large crude carriers (VLCCs).

All six ships have contracts with firm periods of 12 months at an average fixed daily hire of USD 67,300 per day with prompt delivery.

The VLCCs in question include DHT Lake, DHT Raven, DHT Scandinavia, DHT Bauhinia, DHT Edelweiss and DHT Lion. The latest contracts have pushed DHT’s ship tally employed on time charters to ten.

The four other ships all have durations longer than one year expiring between June 2021 and November 2022. They have been employed at average fixed base rates of about USD 31,500 per day with profit-sharing arrangements on top.

DHT said that the charters total to a combined EBIDTA contribution of about USD 121 million during the firm contract periods.

“In addition to being highly profitable, these time charter contracts will reduce the cash break-even levels for our spot trading ships – now down to USD 2,600 per day for the remaining three quarters of 2020. This is in our view very robust,” the company added.

Commenting on the impact of the Covid-19 virus outbreak on its business, DHT Holdings said the biggest operational challenge relates to its seafarers and the company’s ability to change crews on regular intervals.

“This is simply put a headache and means in many instances that the crew must stay onboard longer than planned. We are grateful for the fantastic spirit of cooperation and understanding we receive from our seafarers and their families,” the company’s CO-CEOs Trygve P. Munthe and Svein Moxnes Harfjeld wrote in a letter to shareholders.

The other area that could present challenges is getting supplies delivered to the ships. However, so far the company has managed to overcome these challenges due to good planning.

The duo described the tanker market as highly cyclical and volatile amid dramatic swings in developments. Nevertheless, the company believes that it is here where opportunities lie.

” By continuing to apply strong discipline with respect to allocating capital and manage our fleet in a countercyclical manner in combination with a keen focus on robust cash break-even levels for our ships operating in the spot market, we believe DHT to be well-positioned come rain or shine. 

“We like our current position and have all ships in the water earning money. Our balance sheet is strong and healthy, and we enjoy excellent support from our banking universe,” the letter concluded.