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
November 14, 2006 related to third 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 November 14, 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: December 8, 2006 | By: | /s/ Eirik Uböe |
| Eirik Uböe | ||
| Chief Financial Officer | ||
Exhibit
99.1
Double
Hull Tankers, Inc. Reports Third Quarter 2006 Results
ST.
HELIER, JERSEY, CHANNEL ISLANDS, November 14, 2006 - Double Hull Tankers, Inc.
(NYSE:DHT) today announced results for the period from July 1 to September
30,
2006. Total revenues for this period were $21.3 million and net income was
$8.4
million, or $0.28 per share (diluted). The Board of Directors of DHT has
declared a dividend of $0.42 per share, which will be paid on December 6, 2006
to shareholders of record as of the close of business November 27, 2006. DHT
plans to host a conference call at 9 am ET on November 14, 2006 to discuss
the
results for the quarter. See below for further details.
Background
On
October 18, 2005, having completed its initial public offering, DHT acquired
seven double hull crude oil tankers from 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.
Third
Quarter 2006 Results
Total
revenues for the third quarter of $21.3 million ($19.4 million in the second
quarter) consist of $17.0 million in base charter hire revenue and $4.3 million
in additional hire under our profit sharing arrangements with OSG. Of the
additional hire, $2.6 million relates to the VLCCs and $1.7 million relates
to
the Aframax vessels. In the third quarter, DHT’s VLCC and Aframax tankers
achieved average time charter equivalent (TCE) earnings in the commercial pools
of $64,200 ($46,800 in the second quarter) and $33,000 ($27,200 in the second
quarter) 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 third quarter were $48,000 ($41,000 in the second
quarter) and $26,200 ($23,800 in the second quarter) per day for the VLCCs
and
Aframax vessels, respectively.
2
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 second quarter, the vessels’
revenue days were 244 (272 days in the second quarter) for the VLCCs and 368
(345 days in the second quarter) for the Aframax vessels.
For
the
third quarter of 2006 DHT’s vessel expenses, including insurance costs, were
$4.9 million, depreciation and amortization expenses were $4.3 million and
general and administrative expenses were $0.5 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 stronger in the third quarter of 2006
than anticipated, with rates above the base charter hire rates of DHT’s charter
arrangements with OSG, both for the VLCCs and the Aframax tankers. The strong
market in the third quarter can be attributed to several factors. The continued
changes in the pattern of sourcing of crude oil resulted in longer
transportation distances and reduction in the trading efficiency of the
worldwide fleet due to an increased preference for double hull tankers and
longer waiting times for single hull tankers. In addition, there was a
substantial build up of crude oil inventories as a precaution for the expected
hurricane season in US Gulf and the first phase of building of strategic
reserves in China took place. Also political uncertainties and the temporary
closure of the Prudhoe pipeline were factors in supporting the strong rates
in
the third quarter.
Vessels’
Charter Arrangements and Vessel Operations
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. Additionally, vessels can be subject
to
unscheduled off hire for ongoing maintenance purposes.
In
July,
the Overseas
Ann
underwent its scheduled dry docking for the purpose of special survey resulting
in 17 days off hire. In July/August, the Overseas
Chris
underwent its scheduled dry docking for the purpose of special survey resulting
in 13 days off hire.
Repairs
to a fuel pump on the Regal
Unity in
October resulted in 7 days offhire which will be accounted for in the fourth
quarter. The Overseas
Sophie
is
scheduled to undergo interim survey in the fourth quarter of 2006, and combined
with repairs to a generator, this is expected to result in about 3 days off
hire. In the first half of 2007, the Regal Unity is scheduled to undergo its
scheduled dry docking for the purpose of special survey resulting in an
estimated 14 days off hire. The two Aframaxes, Rebecca
and
Ania,
are
scheduled to undergo interim surveys in the second and third quarter of 2007,
respectively, resulting in an estimated 3 days off hire per vessel.
3
Growth
Strategy
Our
strategy to selectively grow through a disciplined and low risk approach focused
on dividend and shareholders value remains unchanged. We have reviewed a number
of growth opportunities during 2006, but while we have found many to be
accretive to dividend per share in the short term, we have not identified any
that we also believe will add to long term shareholder value.
FINANCIAL
INFORMATION
SUMMARY
CONSOLIDATED STATEMENTS OF OPERATIONS*
($
in
thousands except per share amounts)
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3Q
2006
July
1 - Sept. 30, 2006
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2Q
2006
April
1 - June 30, 2006
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1Q
2006
Jan
1 - March 31, 2006
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9
months
Jan.
1 - Sept.
30,
2006
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Shipping
revenues
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$21,299
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$19,363
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$24,198
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$64,860
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Vessel
expenses
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4,866
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4,679
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4,496
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14,041
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Depreciation
and amortization
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4,263
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4,216
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4,172
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12,651
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General
and administrative
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487
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577
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604
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1,668
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Total
operating expenses
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9,616
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9,472
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9,272
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28,360
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Income
from vessel operations
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11,683
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9,891
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14,926
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36,500
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Interest
income
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217
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267
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196
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680
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Interest
expense and amortization
of
deferred debt issuance cost
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3,499
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3,496
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3,468
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10,463
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Net
income
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8,401
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6,662
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11,654
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26,717
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Basic
net income per share
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$0.28
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$0.22
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$0.39
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$0.89
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Diluted
net income per share
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$0.28
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$0.22
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$0.39
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$0.89
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Weighted
average number of
shares
(basic)
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30,006,250
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30,006,250
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30,006,250
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30,006,250
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Weighted
average number of
shares
(diluted)
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30,017,448
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30,010,634
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30,013,806
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30,014,089
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*
Comparative financial information for the first half of 2005 is not included
because this information pertains to operations of DHT’s
predecessor. Comparative information
is therefore not meaningful.
SUMMARY
CONSOLIDATED BALANCE SHEETS
($
in
thousands)
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Sept.
30, 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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$16,840
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$15,893
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Voyage
receivables from OSG
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4,306
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5,506
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Unrealized
gain on interest rate swap
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1,596
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-
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Prepaid
Expenses
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117
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281
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Prepaid
Technical Management Fee to OSG
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1,324
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1,324
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Total
Current Assets
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24,183
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23,004
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Vessels,
net
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326,840
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339,491
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Other
assets incl. deferred debt issuance cost
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1,447
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1,567
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Total
Assets
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$352,470
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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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$3,522
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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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6,126
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6,126
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Total
Current liabilities
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9,648
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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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Total
Stockholders equity*
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106,822
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117,234
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Total
Liabilities and Stockholders' Equity
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$352,470
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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 from OSG. 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 November 14, 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 (800) 638-5439
within the United States and +1-617-614-3945 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 November
14, 2006 through midnight ET on November 21, 2006 by calling toll free (888)
286-8010 within the United States or +1-617-801-6888 for international callers.
The passcode for the replay is 93536486. 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