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 2008
DOUBLE HULL TANKERS, INC.
(Exact
name of Registrant as specified in its charter)
26 New
Street
St.
Helier, Jersey JE2 3RA
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 May 14, 2008 related to first
quarter 2008 results is attached hereto as Exhibit 99.1 and is incorporated
herein by reference.
|
Exhibit
|
Description
|
|
|
99.1
|
Press
Release dated May 14, 2008 of Double Hull Tankers, Inc.
|
|
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)
|
||||||||
|
Date:
May 14, 2008
|
By:
|
/s/
Eirik Ubøe
|
||||||
|
Eirik
Ubøe
Chief
Financial Officer
|
||||||||
Double
Hull Tankers, Inc. Reports First Quarter 2008 Results
ST.
HELIER, JERSEY, CHANNEL ISLANDS, May 14, 2008– Double Hull Tankers, Inc.
(NYSE:DHT) today announced results for the period from January 1 to March 31,
2008. Total revenues for this period were $24.9 million and net income was $7.6
million, or $0.25 per share (diluted). The Board of Directors of DHT has
declared a dividend of $0.25 per share in accordance with the currently declared
fixed dividend policy. The dividend will be paid on June 11, 2008 to
shareholders of record as of the close of business on May 30, 2008. DHT plans to
host a conference call at 9 am ET on May 14, 2008 to discuss the results for the
quarter. See below for further details.
First
Quarter 2008 Results
Total
revenues for the first quarter of $24.9 million (compared to $20.2 million in
the first quarter of 2007) consist of $22.1 million in base charter hire and
$2.8 million in additional hire under the company’s profit sharing arrangements
with the charterer of the vessels, Overseas Shipholding Group, Inc. ("OSG"). Of
the total base charter hire, $18.0 million relates to the seven vessels on time
charter and $4.1 million relates to the two vessels on bareboat charter. Of the
total additional hire, $1.8 million relates to DHT’s three Very Large Crude
Carriers (“VLCCs”), $0.9 million relates to DHT’s four Aframax tankers and $0.1
million relates to one of DHT’s Suezmax tankers, the Overseas
Newcastle.
In the
quarter ended March 31, 2008, DHT’s VLCCs achieved average time charter
equivalent (“TCE”) earnings in the commercial pool of $96,100 per day (compared
to $34,900 per day in the fourth quarter of 2007 and $46,700 per day in the
first quarter of 2007) and the Aframax tankers achieved average TCE earnings of
$33,600 per day (compared to $25,800 per day in the fourth quarter of 2007 and
$38,300 per day in the first quarter of 2007), according to data from the
commercial pools. The Suezmax tanker Overseas Newcastle achieved average TCE
earnings for the quarter of $38,000 per day.
In
general, through the profit sharing elements of the time charter agreements for
the VLCCs and the Aframax tankers, 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 Overseas Newcastle has a profit
sharing arrangement whereby DHT earns an additional amount equal to 33% of the
vessel’s TCE earnings above the TCE of $35,000 for the quarter calculated on a
four quarter rolling average.
2
In the
quarter ended March 31, 2008, revenue days were 270 for the VLCCs (compared to
260 revenue days in the first quarter of 2007) and 364 for the Aframaxes
(compared to 353 revenue days in the first quarter of 2007). The Suezmax tankers
Overseas Newcastle and Overseas London, which were delivered on December 4, 2007
and January 28, 2008, respectively, and are on bareboat charters to OSG, had a
total of 154 revenue days in the quarter.
For the
quarter ended March 31, 2008, DHT’s vessel expenses, including insurance costs,
were $4.7 million, depreciation and amortization expenses were $6.2 million and
general and administrative expenses were $1.0 million. Net finance expenses,
including amortization of deferred debt issuance costs, were $5.4 million for
the quarter ended March 31, 2008.
Market
Update
The first
quarter of 2008 benefited from the surge in the freight market at the end of
2007 and a continued strong market in first quarter. Increased OPEC production
quotas led to an increase in long haul shipments. Traditionally, the first
quarter is a period of replenishment of inventories, but the price backwardation
in the oil market has not given any incentive for seasonal stock building during
the quarter.
China’s
demand for oil imports continues to be the key driver for the growth in tanker
demand.
Market
fundamentals for oil transportation by sea remain solid.
A
balanced tanker demand and supply is keeping freight rates at healthy
levels. In addition to conversion of tankers and newbuilding orders
into vessels other than tankers, the balanced market for tankers is a result of
increased commercial obsolescence, scrapping and banning of single hull tankers
in advance of the mandatory phase out commencing in 2010.
Tankers
with a double hull design continue to trade at a premium rate to single hull
tankers and the difference appears to be widening. Additionally, tankers of
double hull design experience shorter waiting time between cargoes.
The pools
in which DHT’s VLCCs and Aframax tankers operate are reporting booking of pool
capacity for the second quarter of 2008 at TCE rates averaging $78,000 per day
for the VLCCs with two thirds of the second quarter revenue days booked, and
$48,500 per day for the Aframax tankers, with one third of the second quarter
revenue days booked.
Vessels’
Charter Arrangements and Vessel Operations
Of the
fleet of nine vessels, seven vessels are time chartered to OSG until the end of
2010 to early 2012. The two recently delivered Suezmax tankers are bareboat
chartered to OSG until 2014 and 2018, respectively. We believe that
the base hire component of each of our charters will provide for stable cash
flows during any down turns in the market, as the charters provide for fixed
monthly base hire payments regardless of prevailing market rates, so long as the
vessel is not off hire. In addition, with respect to eight of the nine charters,
if market rates exceed the daily base hire rates set forth in such charters, we
have the opportunity to participate in any such excess under the profit sharing
component of the applicable charter arrangements.
3
DHT’s two
Suezmax tankers are bareboat chartered to OSG for terms of seven years and ten
years, respectively, with charter hire payable 365 days per year and no
operating expenses for the account of DHT, providing for stable earnings over
the charters periods. In addition, one of the Suezmax tankers, the Overseas
Newcastle has a profit sharing arrangement.
The
present spot market in which the vessels are operating is substantially higher
than the base charter hire, and serve as the basis for the vessels to earn
additional hire and generate cash flow over and above the base hire under the
profit sharing arrangement.
The seven
vessels on time charter are subject to scheduled periodic dry docking for the
purpose of special survey and other interim inspections. In addition to
scheduled off hire, these vessels can be subject to unscheduled off hire for
ongoing maintenance purposes. Unlike vessels on bareboat charter, vessels on
time charter are not paid hire when off hire. Total days of offhire
for running repairs and mandatory inspections amounted to three days during the
quarter.
One of
the Aframax tankers, the Overseas Ania is scheduled
for statutory class inspection in the second quarter of 2008. This vessel is
employed in the U.S. lightering trade and it is expected that the scheduled
interim survey will result in about 20 days off hire. The Aframaxes
Overseas Sophie and
Overseas Cathy are
scheduled for drydocking (special survey) in late 2008 or early
2009.
Recent
Developments
On April
29, 2008 DHT issued 8 million shares in a marketed follow-on public offering of
common stock raising approximately $80 million after expenses and
fees. The offering saw strong demand from investors and was increased
from 7 to 8 million shares. The offering was priced with no discount to last
trade. The new capital from the offering has substantially strengthened DHT’s
balance sheet for the purpose of growth after the recent acquisition of the two
Suezmax tankers, the Overseas
Newcastle and the
Overseas London. On May 9, 2008, the underwriters exercised their
overallotment option for a total of 1.2 million shares resulting in
approximately $12 million in additional proceeds. Total number of shares
outstanding after the completion of the offering will be approximately 39.2
million shares, all of which are entitled to quarterly dividends under the DHT’s
current fixed dividend policy of $0.25 per share.
FINANCIAL
INFORMATION
SUMMARY
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in
thousands except per share amounts)
|
1Q
2008
Jan
1-March
31, 2008 |
1Q
2007
Jan
1-March
31, 2007 |
|||||||
|
Shipping
revenues
|
$ | 24,889 | $ | 20,231 | ||||
|
Vessel
expenses
|
4,713 | 4,775 | ||||||
|
Depreciation
and amortization
|
6,193 | 4,171 | ||||||
|
General
and administrative
|
1,001 | 807 | ||||||
|
Total
operating expenses
|
11,907 | 9,753 | ||||||
|
Income
from vessel operations
|
12,982 | 10,478 | ||||||
|
Interest
income
|
148 | 220 | ||||||
|
Interest
expense and amortization of deferred debt issuance cost
|
5,505 | 3,492 | ||||||
|
Net
income
|
7,625 | 7,206 | ||||||
|
Basic
net income per share
|
$ | 0.25 | $ | 0.24 | ||||
|
Diluted
net income per share
|
$ | 0.25 | $ | 0.24 | ||||
|
Weighted
average number of shares (basic)
|
30,030,811 | 30,013,954 | ||||||
|
Weighted
average number of shares (diluted)
|
30,030,811 | 30,027,438 | ||||||
SUMMARY
CONSOLIDATED BALANCE SHEETS
($ in
thousands)
|
March
31, 2008
|
Dec.
31, 2007
|
|||||||
|
Current
Assets
|
||||||||
|
Cash
and Cash Equivalents
|
$ | 22,485 | $ | 10,365 | ||||
|
Voyage
receivables from OSG
|
2,801 | 1,547 | ||||||
|
Unrealized
gain on interest rate swap
|
||||||||
|
Prepaid
Expenses
|
698 | 452 | ||||||
|
Prepaid
Technical Management Fee to OSG
|
1,313 | 1,357 | ||||||
|
Total
Current Assets
|
27,297 | 13,721 | ||||||
|
Vessels,
net
|
482,143 | 398,005 | ||||||
|
Other
assets incl. deferred debt issuance cost
|
1,424 | 1,337 | ||||||
|
Vessel
acquisition deposits
|
9,145 | |||||||
|
Total
Assets
|
$ | 510,864 | $ | 422,208 | ||||
|
Current
Liabilities
|
||||||||
|
Accounts
payable and accrued expenses
|
$ | 4,976 | $ | 4,409 | ||||
|
Unrealized
loss on interest rate swap
|
21,944 | 10,218 | ||||||
|
Deferred
shipping revenues
|
7,580 | 7,006 | ||||||
|
Current
instalment of long term debt
|
75,000 | 75,000 | ||||||
|
Total
Current liabilities
|
109,500 | 96,633 | ||||||
|
Long
term debt
|
344,000 | 253,700 | ||||||
|
Total
Stockholders equity
|
57,364 | 71,875 | ||||||
|
Total
Liabilities and Stockholders' Equity
|
$ | 510,864 | $ | 422,208 | ||||
EARNINGS
CONFERENCE CALL INFORMATION
DHT plans
to host a conference call at 9 am ET on May 14, 2008 to discuss the results for
the first quarter. All shareholders and other interested parties are invited to
call into the conference call, which may be accessed by calling (866) 825-1692
within the United States and +1-617-213-8059 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 4:00 p.m. ET on May 14,
2008 through May 21, 2008 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 18946784. 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