Impairment Charges Hurt DHT’s 1Q Profit
Bermuda-based tanker shipping company DHT Holdings posted a net income of USD 14.3 million in the first quarter of 2017, down from a net income of USD 31.5 million reported in the same period last year.
Shipping revenues for the quarter amounted to USD 92.1 million compared to shipping revenues of USD 107.6 million seen in the three-month period of 2016. As informed, the change was due to lower tanker rates partly offset by an increase in the fleet.
DHT’s VLCCs achieved time charter equivalent (TCE) earnings of USD 40,100 per day in 1Q 2017 of which the company’s VLCCs on time-charter earned USD 38,800 per day and the VLCCs operating in the spot market USD 40,900 per day.
The company took delivery in January of the last of its six VLCC newbuilds ordered from South Korean Hyundai Heavy Industries (HHI) shipyard in 2013 and 2014. The ship is named DHT Tiger and is trading in the spot market, according to DHT.
Also in January, the company inked a deal with HHI for the construction of two VLCCs of 318,000 dwt.
In March, the company entered into agreements with BW Group to acquire BW’s VLCC fleet which comprises eleven VLCCs including two newbuildings. To date, DHT has taken delivery of seven of the tankers and novated the two newbuilding contracts.
Furthermore, DHT entered in April into a six-year term loan and revolving credit facility agreement worth USD 300 million with ABN Amro, DNB and Nordea for the financing of the cash portion of the acquisition of BW’s VLCC fleet as well as the remaining installments under the two newbuilding contracts. As disclosed, USD 204 million is expected to be drawn in connection with the delivery of the nine vessels in the water and the remaining USD 96 million in connection with the delivery of the two newbuilds in the second quarter of 2018.
Separately, DHT has rejected the latest offer by Frontline to acquire all of the outstanding shares of common stock of DHT at a ration of 0.8 Frontline shares for each DHT share.
Currently, DHT has a fleet of 30 VLCCs, 26 in the water and four under construction, as well as two Aframaxes.