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 August 2007
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))
The
press
release issued by Double Hull Tankers, Inc. on August 29, 2007 related to second
quarter 2007 results is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
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Exhibit
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Description
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99.1
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Press
Release dated August 29, 2007 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.
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Double
Hull Tankers, Inc.
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(Registrant)
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Date:
August 29, 2007
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By:
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/s/
Eirik Ubøe
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Eirik
Ubøe
Chief
Financial Officer
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Exhibit
99.1
Double
Hull Tankers, Inc. Reports Second Quarter 2007 Results
ST.
HELIER, JERSEY, CHANNEL ISLANDS, AUGUST 29, 2007 – Double Hull Tankers, Inc.
(NYSE:DHT) today announced results for the period from April 1 to June 30,
2007.
Total revenues for this period were $20.7 million and net income was $7.4
million, or $0.25 per share (diluted). The Board of Directors of DHT has
declared a dividend of $0.39 per share, which will be paid on September 21,
2007
to shareholders of record as of the close of business on September 12, 2007.
DHT
plans to host a conference call at 9 am ET on August 29, 2007 to discuss the
results for the quarter. See below for further details.
Second
Quarter 2007 Results
Total
revenues for the second quarter of $20.7 million ($19.4 million in the second
quarter of 2006) consist of $17.5 million in base charter hire revenue and
$3.2
million in additional hire under the company’s profit sharing arrangements with
Overseas Shipholding Group, Inc. (“OSG”). Of the additional hire, $1.6 million
relates to DHT's Very Large Crude Carriers (“VLCCs”) and $1.6 million relates to
DHT's Aframax tankers. In the quarter ended June 30, 2007, DHT’s VLCCs achieved
average time charter equivalent (“TCE”) earnings in the commercial pool of
$51,900 per day (compared to $46,800 per day in the second quarter of 2006
and
$46,700 per day in the first quarter of 2007) and the Aframax tankers achieved
$30,100 per day (compared to $27,200 per day in the second quarter of 2006
and
$38,300 per day in the first quarter of 2007), according to data from the
commercial pools. Approximately 25% of the revenue days in the Aframax
International pool in the second quarter relate to vessels time chartered out
by
the pool at an average rate of approximately $29,000 per day.
In
general, through the profit sharing elements of the charter agreements, DHT
earns an additional amount equal to 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
quarter ended June 30, 2007 were $44,200 per day for the VLCCs (compared to
$41,000 per day in the second quarter of 2006 and $42,400 per day in the first
quarter of 2007) and $26,600 per day for the Aframax vessels (compared to
$23,800 per day in the second quarter of 2006 and $26,100 per day in the first
quarter of 2007).
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 relevant period, or “revenue days”. In the quarter ended
June 30, 2007, revenue days were 260 for the VLCCs (compared to 272 revenue
days
in the second quarter of 2006) and 348 for the Aframaxes (compared to 345
revenue days in the second quarter of 2006).
2
For
the
quarter ended June 30, 2007, DHT’s vessel expenses, including insurance costs,
were $5.1 million, depreciation and amortization expenses were $4.2 million
and
general and administrative expenses were $0.7 million.
For
the
quarter ended June 30, 2007, 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 2010. The
term loan is non-amortizing until January 2011.
Market
Update
The
tanker market remained strong during the second quarter period, although it
was
affected by substantial refinery maintenance in the United States and OPEC’s
curtailment of supplies to the market. China’s continued strong demand for
oil imports remained the key driver for the growth in demand, but OECD countries
also contributed positively with an increase in oil consumption after more
than
a year in decline.
The
strong dry cargo market resulting in increased conversion of older, single
hull
VLCCs to Very Large Ore Carriers and delays in deliveries of newbuild vessels
are having a positive impact on the supply-demand balance. As the number of
single hull VLCCs is decreasing, pressure on freight rates for the double hull
vessels is abating.
The
market fundamentals remain solid due to the strong world economy and the
continued increase in distances between oil producers and consumers, leading
to
increased tonne-mile demand. In addition, high oil prices are encouraging
increased oil production within both OPEC and non-OPEC countries such as Russia,
further increasing the demand for oil transportation.
Freight
rates in the fourth quarter of 2007 are expected to significantly exceed the
freight rates in the second and third quarters, which historically are the
weaker quarters of the year.
Vessels’
Charter Arrangements and Vessel Operations
Our
current fleet of seven vessels has 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 any such excess under the profit sharing
component of our charter arrangements.
All
our
vessels are subject to scheduled periodic dry docking for the purpose of special
survey and other interim inspections. Additionally, our vessels can be subject
to unscheduled off hire for ongoing maintenance purposes.
3
Overseas
Regal, one of the company’s VLCCs, entered drydock in March for the
commencement of a scheduled special survey by Class. The vessel completed the
docking in mid-April which resulted in 13 days off hire in the second
quarter.
Overseas
Rebecca, one of the company’s Aframaxes, underwent a
scheduled interim survey by Class in the period June – July, which resulted in
13 days of off hire in the second quarter. An additional 9 days of off hire
will
be reflected in the company’s third quarter results. This period of off hire was
longer than expected as a result of stricter regulation for permitting
preparatory work in advance of the survey while employed in the U.S.
lightering trade.
Overseas
Ania, another of the company’s Aframaxes, is expected to
undergo a scheduled interim survey by Class in the third
quarter. This vessel is also employed in the U.S. lightering trade
and it is expected that the vessel will also be offhire for a time period
similar to Overseas Rebecca.
There
are no scheduled drydockings until the end of 2008 or early 2009 (the
Aframaxes Overseas Sophie and Overseas Cathy).
Recent
Developments
On
July
27, 2007, DHT announced that it had entered into an agreement to acquire a
2001-built 164,000 deadweight tonne Suezmax tanker for $92.7 million scheduled
for delivery in November / December 2007. The vessel will be bareboat
chartered to OSG for a term of seven years. The charter has a rate of $26,300
per day for the first three years and $25,300 per day for the last four years.
In addition to the bareboat charter rate, DHT will, through the profit sharing
element of the charter agreement, earn 33% of the vessel’s earnings above the
TCE rate of $35,000 per day for the first three years and above $34,000 per
day
for the last four years, calculated on a four quarter rolling
average.
The
acquisition of the vessel is consistent with DHT’s strategy of having a fleet of
modern, high quality vessels providing for stable earnings. Also, the
addition of a Suezmax tanker is in line with DHT’s strategy to diversify its
fleet and to charter its vessels to first rate charterers. The completion of
the
acquisition is subject to a number of customary closing conditions. DHT plans
to
finance the purchase through its current facility with The Royal Bank of
Scotland.
Annual
Shareholders Meeting
The
2007
Annual Shareholders Meeting was held on Wednesday, June 20, 2007. The
shareholders voted to re-elect Randee Day as DHT’s Class II Director for a term
of three years and to ratify Ernst & Young LLP as DHT’s independent auditors
for the 2007 fiscal year.
FINANCIAL
INFORMATION
SUMMARY
CONSOLIDATED STATEMENTS OF OPERATIONS
($
in
thousands except per share amounts)
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2Q
2007
April
1-June 30, 2007
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2Q
2006
April
1-June 30, 2006
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Shipping
revenues
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$20,745
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$19,363
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Vessel
expenses
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5,095
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4,679
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Depreciation
and amortization
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4,217
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4,216
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General
and administrative
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746
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577
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Total
operating expenses
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10,058
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9,472
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Income
from vessel operations
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10,686
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9,891
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Interest
income
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226
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267
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Interest
expense and amortization of deferred debt issuance cost
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3,495
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3,496
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Net
income
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7,418
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6,662
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Basic
net income per share
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$0.25
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$0.22
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Diluted
net income per share
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$0.25
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$0.22
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Weighted
average shares (basic)
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30,026,431
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30,006,250
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Weighted
average shares (diluted)
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30,044,038
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30,010,634
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SUMMARY
CONSOLIDATED BALANCE SHEETS
($
in
thousands)
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June
30, 2007
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Dec.
31, 2006
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Current
Assets
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Cash
and Cash Equivalents
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$17,142
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$17,680
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Voyage
receivables from OSG
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3,268
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4,009
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Unrealized
gain on interest rate swap
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3,760
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1,712
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Prepaid
Expenses
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436
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331
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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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25,930
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25,056
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Vessels,
net*
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314,189
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322,577
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Other
assets incl. deferred debt issuance cost
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1,327
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1,407
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Total
Assets
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$341,446
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$349,040
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Current
Liabilities
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Accounts
payable and accrued expenses
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$3,642
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$3,456
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Unrealized
loss on interest rate swap
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-
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Deferred
Shipping Revenues
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6,169
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6,169
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Total
Current liabilities
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9,811
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9,625
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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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95,635
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103,415
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Total
Liabilities and Stockholders’ Equity
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$341,446
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$349,040
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| *In October 2005, DHT acquired the 7 vessels in its initial 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 August 29, 2007 to discuss the results
for the second quarter. All shareholders and other interested parties are
invited to call into the conference call, which may be accessed by calling
(800)
561-2718 within the United States and +1-617-614-3525 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 August
29,
2007 through 1 p.m. ET on September 5, 2007 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 16628504. 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 latest annual report on Form 20-F 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 |