SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form 6-K
Report
of Foreign Issuer
Pursuant
to Rule 13a-16 or 15d-16 of
the
Securities Exchange Act of 1934
For
the month of May 2006
DOUBLE
HULL TANKERS, INC.
(Exact
name of Registrant as specified in its charter)
26
New
Street
St.
Helier, Jersey JE23A
Channel
Islands
(Address
of principal executive offices)
(Indicate
by check mark whether the registrant files or will file annual reports under
cover of Form 20-F or Form 40-F.)
Form 20-F
þ Form 40-F
o
(Indicate
by check mark whether by furnishing the information contained in this Form,
the
Registrant is also thereby furnishing the information to the Commission pursuant
to Rule 12g3-2 (b) under the Securities Exchange Act of 1934.)
Yes
o
No þ
(If
“Yes”
is marked, indicate below the file number assigned to the registrant in
connection with Rule 12g3-2 (b))
Attached
as Exhibit 99.1 is the press release issued by
Double Hull Tankers, Inc. on May 22, 2006 related to first quarter 2006 results.
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Exhibit
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Description
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99.1
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Press
Release dated May 22, 2006 of Double Hull Tankers, Inc.
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Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
| Double Hull Tankers, Inc. | ||
| (Registrant) | ||
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| Date: May 22, 2006 | By: | /s/ Eirik Uböe |
| Eirik Uböe | ||
| Chief Financial Officer | ||
Double
Hull Tankers, Inc. Reports First Quarter 2006 Results
ST.
HELIER, JERSEY, CHANNEL ISLANDS, May 22, 2006 - Double Hull Tankers, Inc.
(NYSE:DHT) today announced results for the period from January 1 to March 31,
2006. Total revenues for this period were $24.2 million and net income was
$11.7
million, or $0.39 per share (diluted). The Board of Directors of DHT has
declared a dividend of $0.53 per share, which will be paid on June 16, 2006
to
shareholders of record as of the close of business June 1, 2006.
Background
On
October 18, 2005, having completed its initial public offering, DHT acquired
seven double hull crude oil tankers from Overseas Shipholding Group, Inc. (OSG)
and commenced operations as an independent tanker company. DHT's modern fleet
consists of three Very Large Crude Carriers (VLCCs) and four Aframax tankers.
From
the
same date, all seven vessels have been chartered to OSG for periods ranging
from
five to six and one-half years. OSG in turn employs the three VLCCs in the
Tankers International (TI) pool, the largest commercial pool for VLCCs, and
the
four Aframaxes in the Aframax International (AI) pool, the second largest
commercial pool for Aframaxes. DHT receives a base charter hire and may, through
profit sharing agreements, benefit from the vessels’ earnings in the pools over
and above the base charter hire rates. The technical operations of the vessels
(crewing, maintenance, repairs, drydockings etc.) are conducted by a subsidiary
of OSG at substantially fixed costs to DHT.
First
Quarter Results
Total
revenues of $24.2 million consist of $17.5 million in base charter hire revenue
and $6.7 million in additional hire under our profit sharing arrangements with
OSG. Of the additional hire, $4.1 million relates to the VLCCs and $2.6 million
relates to the Aframax vessels. In the first quarter, DHT’s VLCC and Aframax
tankers achieved average time charter equivalent (TCE) earnings in the
commercial pools of $75,800 and $39,700 per day, respectively, according to
data
from the commercial pools. In general, through the profit sharing agreements,
DHT earns 40% of the excess of the vessels’ actual net TCE earnings in the
commercial pools over the base charter hire rates for the quarter, calculated
on
a fleet wide basis and on a four quarter rolling average. The actual average
TCE
earnings that DHT received for its vessels during the first quarter were $52,600
and $28,700 per day for the VLCCs and Aframax vessels,
respectively.
Actual
average TCE earnings are calculated by dividing the total revenue actually
earned by the vessels by the sum of the total days each vessel was on hire
during the period, or “revenue days”. In the first quarter, the vessels’revenue
days were 267 for the VLCCs and 352 for the Aframax vessels.
DHT’s
vessel expenses, including insurance costs, were $4.5 million for the quarter,
depreciation and amortization expenses were $4.2 million and general and
administrative expenses were $0.6 million.
Net
finance expenses, including amortization of deferred debt issuance costs, were
$3.3 million. DHT has entered into an interest rate swap agreement for the
full
amount of its term loan of $236 million, effectively fixing the interest rate
at
5.6% until October 18, 2010. The term loan is non-amortizing until October
18,
2010.
Market
Update
Market
rates for VLCCs and Aframax tankers were strong in the first quarter of 2006
with rates well above the base charter hire rates in DHT’s charter arrangements
with OSG for both the VLCCs and the Aframax tankers. Presently we are
experiencing an expected seasonal decline, exacerbated by more than normal
refinery capacity being shut down for maintenance in the United States. The
effect is a lower fleet utilization and downward pressure on daily freight
rates.
We
continue to see increased demand by charterers for double hull tankers compared
to single hull tankers, leading to a premium being paid for double hull tankers.
Vessels’
Charter Arrangements
Our
fleet
of seven vessels have been time chartered to OSG from October 2005 for periods
of 5-6 ½ years. We believe that the base hire component of each of our time
charters will provide us with stable cash flows during market downturns, as
our
charters provide for fixed monthly base hire payments regardless of prevailing
market rates so long as the vessel is not off hire. If market rates exceed
the
daily base hire rates set forth in our charters, we have the opportunity to
participate in the excess due to the profit sharing component of our charter
arrangements, as mentioned above.
All
vessels are subject to scheduled periodic dry docking for the purpose of special
survey and other interim inspections. This is expected to lead to 24 days of
scheduled off hire for the VLCCs and 4 days for the Aframax tankers in the
second half of the year. Additionally, vessels can be subject to unscheduled
off
hire for ongoing maintenance purposes.
Growth
Strategy
Our
strategy is to selectively grow through a disciplined and low risk approach
focused on dividend and shareholders value. We have reviewed a number of growth
opportunities during the first quarter of 2006, but have not found any to add
to
shareholder value.
Annual
Shareholders Meeting
The
2006
Annual Shareholders Meeting will be held on Thursday, June 22, 2006 at 11:00
a.m. local time at the offices of Double Hull Tankers, Inc., 26 New Street,
St.
Helier, Jersey, The Channel Islands.
FINANCIAL
INFORMATION
SUMMARY
CONSOLIDATED STATEMENTS OF OPERATIONS*
($
in
thousands except per share amounts)
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January
1 to
March 31, 2006 |
October
18 to
December 31, 2005 |
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Shipping
revenues
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$24,198
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$20,173
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Vessel
expenses
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4,496
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3,675
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Depreciation
and amortization
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4,172
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3,478
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General
and administrative
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604
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746
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Total
vessel operating expenses
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9,272
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7,899
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Income
from vessel operations
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14,926
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12,274
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Interest
income
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196
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67
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| Interest expense and amortization of deferred debt issuance cost | 3,468 | 2,872 |
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Net
income
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11,654
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$9,469
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Basic
net income per share
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$0.39
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$0.32
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Diluted
net income per share
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$0.39
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$0.32
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Weighted
average number of shares (basic)
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30,006,250
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30,006,250
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Weighted
average number of shares (diluted)
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30,013,806
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30,008,190
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*Comparative financial information for the first quarter of 2005 is not included
because this information pertains to operations of DHT’s
predecessor.
Quarterly comparative information is therefore not meaningful.
SUMMARY
CONSOLIDATED BALANCE SHEETS
($
in
thousands)
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March
31, 2006
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December
31, 2005
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Current
Assets
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Cash
and Cash Equivalents
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$17,946
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$15,893
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Voyage
receivables from OSG
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6,692
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5,506
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Unrealized
gain on interest rate swap
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3,398
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-
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Prepaid
Expenses
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223
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281
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Prepaid
Technical Management Fee to OSG
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1,281
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1,324
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Total
Current Assets
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29,540
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23,004
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Vessels,
net
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335,339
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339,491
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Deferred
debt issuance cost
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1,527
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1,567
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Total
Assets
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$366,406
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$364,062
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Current
Liabilities
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Accounts
payable and accrued expenses
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$4,437
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$3,895
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Unrealized
loss on interest rate swap
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-
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807
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Deferred
Shipping Revenues
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5,762
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6,126
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Total
Current liabilities
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10,199
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10,828
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Long
term debt
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236,000
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236,000
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Shareholders
equity*
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120,207
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117,234
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Total
Liabilities and Shareholders' Equity
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$366,406
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$364,062
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*In
October 2005, DHT acquired the 7 vessels in its fleet for a total purchase
price
of $580.6 million. However, DHT was required to carry over
OSG’s
historical book values of the vessels to its books, and the excess of the
aggregate purchase price above their historical book value
was
recorded as a reduction of stockholders’ equity. This reduction amounted to $233
million and represents a deemed dividend to OSG.
EARNINGS
CONFERENCE CALL INFORMATION
DHT
plans
to host a conference call at 9 am ET on May 22, 2006 to discuss the results
for
the quarter. All shareholders and other interested parties are invited to call
into the conference call, which may be accessed by calling (888) 396-2369 within
the United States and +1-617-847-8710 for international calls. The passcode
is
“Double Hull”. A live webcast of the conference call will be available in the
Investor Relations section on DHT's website at http://www.dhtankers.com.
An
audio
replay of the conference call will be available from 11:00 a.m. ET on May 22,
2006 through midnight ET on May 29, 2006 by calling toll free (888) 286-8010
within the United States or +1-617-801-6888 for international callers. The
password for the replay is 88572291. A webcast of the replay will be available
in the Investor Relations section on DHT's website at http://www.dhtankers.com.
Forward
Looking Statements
This
press release contains assumptions, expectations, projections, intentions and
beliefs about future events, in particular regarding daily charter rates, vessel
utilization, the future number of newbuildings, oil prices and seasonal
fluctuations in vessel supply and demand. When used in this document, words
such
as “believe,” “intend,” “anticipate,” “estimate,” “project,” “forecast,” “plan,”
“potential,” “will,” “may,” “should,” and “expect” and similar expressions are
intended to identify forward-looking statements but are not the exclusive means
of identifying such statements. These statements are intended as
“forward-looking statements.” All statements in this document that are not
statements of historical fact are forward-looking statements.
The
forward-looking statements included in this press release reflect DHT’s current
views with respect to future events and are subject to certain risks,
uncertainties and assumptions. We caution that assumptions, expectations,
projections, intentions and beliefs about future events may and often do vary
from actual results and the differences can be material. The reasons for this
include the risks, uncertainties and factors described under the section of
our
prospectus included in our registration statement on Form F-1 entitled “Risk
Factors,” a copy of which is available on the SEC’s website at www.sec.gov.
These include the risk that DHT may not be able to pay dividends; the highly
cyclical nature of the tanker industry; global demand for oil and oil products;
the number of newbuilding deliveries and the scrapping rate of older vessels;
the risks associated with acquiring additional vessels; changes in trading
patterns for particular commodities significantly impacting overall tonnage
requirements; risks related to terrorist attacks and international hostilities;
expectations about the availability of insurance; our ability to repay our
credit facility or obtain additional financing; our ability to find replacement
charters for our vessels when their current charters expire; compliance costs
with environmental laws and regulations; risks incident to vessel operation,
including discharge of pollutants; and unanticipated changes in laws and
regulations.
Should
one or more of these risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
described in the forward-looking statements included in this press release.
DHT
does not intend, and does not assume any obligation, to update these
forward-looking statements.
CONTACT:
Eirik
Ubøe
Phone:
+44 1534 639 759 and +47
412 92 712
E-mail:
info@dhtankers.com
and
eu@tankersservices.com