DHT
Maritime, Inc. Reports Second Quarter 2008 Results
ST.
HELIER, JERSEY, CHANNEL ISLANDS, September 2, 2008 – DHT Maritime, Inc.
(NYSE:DHT) today announced results for the period from April 1 to June 30, 2008.
Total revenues for this period were $27.8 million and net income was $10.3
million, or $0.29 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 September 24, 2008 to
shareholders of record as of the close of business on September 15, 2008. DHT
plans to host a conference call at 9 am ET on September 2, 2008 to discuss the
results for the quarter. See below for further details.
Second
Quarter 2008 Results
Total
revenues for the first quarter of $27.8 million (compared to $20.7 million in
the second quarter of 2007) consist of $22.6 million in base charter hire and
$5.2 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, $17.8 million relates to the seven vessels on time
charter and $4.8 million relates to the two vessels on bareboat charter. Of the
total additional hire, $2.9 million relates to DHT’s three Very Large Crude
Carriers (“VLCCs”), $1.6 million relates to DHT’s four Aframax tankers and $0.7
million relates to one of DHT’s Suezmax tankers, the Overseas
Newcastle.
In the
quarter ended June 30, 2008, DHT’s VLCCs achieved average time charter
equivalent (“TCE”) earnings in the commercial pool of $96,000 per day (compared
to $96,100 per day in the first quarter of 2008 and $44,200 per day in the
second quarter of 2007) and the Aframax tankers achieved average TCE earnings of
$48,800 per day (compared to $33,600 per day in the first quarter of 2008 and
$26,600 per day in the second quarter of 2007), according to data from the
commercial pools. The Suezmax tanker Overseas Newcastle achieved average TCE
earnings for the quarter of $58,000 per day compared to $38,000 per day in the
first quarter of 2008.
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.
In the
quarter ended June 30, 2008, revenue days were 267 for the VLCCs (compared to
270 revenue days in the second quarter of 2007) and 362 for the Aframaxes
(compared to 348 revenue days in the second quarter of 2007). The Suezmax
tankers Overseas Newcastle and Overseas London which are on bareboat charters to
OSG, had a total of 182 revenue days in the quarter.
For the
quarter ended June 30, 2008, DHT’s vessel expenses, including insurance costs,
were $4.8 million, depreciation and amortization expenses were $6.5 million,
general and administrative expenses were $1.0 million and net finance expenses,
including amortization of deferred debt issuance costs, were $5.2
million.
The
operating result through the first half of 2008 has enabled the Company to
strengthen its balance sheet by an estimated $11 million from retention of
operating cashflow. This assists the Company in funding additional growth
opportunities. Additionally, in late April 2008 DHT raised
approximately $92 million in a marketed follow on public equity offering
strengthening the balance sheet further.
Market
Update
The
second quarter of 2008 benefited from the surge in the freight market that
started at the end of 2007 and has continued through first and second quarter.
This is primarily a result of strong Far East demand and ample supply of OPEC
oil increasing the demand for long haul transportation of crude oil. The demand
for oil import to China and the industrialization of the developing economies of
the Far East continue to be the key drivers for the growth in tanker
demand.
Market
fundamentals for transportation of crude oil remain solid. The recent fall in
the oil price is perceived good for the world economies and is expected to
encourage further consumption. Combined with low inventories and high
OPEC production this bodes well for a continued strong demand for oil
transportation by sea.
A
balanced tanker demand and supply is keeping freight rates at reasonable
levels. The market appear to be positively affected by supply factors
such as slow down in speed and port delays increasing the length of voyages and
ton/mile demand. In addition, there is the 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.
With the
spot market above the base charter hire rates there is the basis for the vessels
to earn additional hire and generate cash flow over and above the base hire
under the profit sharing arrangement. For the third quarter the pools in which
DHT’s VLCCs and Aframax tankers operate report booking of pool
capacity at TCE rates averaging $143,500 per day for the VLCCs with
about half of the third quarter revenue days booked, and $54,000 per day for the
Aframax tankers, with about one third of the third quarter revenue days booked.
Also, OSG has reported that as of July 18, 2008, about 40% of the third quarter
Suezmax days had been booked at an average TCE of $69,500 per day.
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.
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. One of the two Suezmax tankers, the Overseas Newcastle has
a 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 8 days during the
quarter.
One of
the Aframax tankers, the Overseas Ania has completed
the statutory class inspection in the second quarter of 2008 without docking,
but is expected to complete some repairs in the third quarter that is estimated
to result in 5-7 days off hire. The Aframaxes Overseas Sophie and Overseas Cathy are scheduled
for drydocking (special survey) in late 2008 or early 2009. These special
surveys are expected to result in about 20 days off hire for each
vessel.
Recent
Developments
Following
approval by the shareholders at the Company’s Annual General Meeting on June 18,
2008, the Company changed its name to DHT Maritime, Inc. We considered this a
more suitable name in light of the majority of the operative world tanker fleet
now being of double hull construction.
Overseas Ania left the
Aframax International Pool as of July 1, 2008 and is chartered by OSG to its
wholly owned subsidiary OSG Lightering at $29,000 per day for the remaining
period of the initial charter period terminating in October 2010. The rate of
$29,000 per day also serves as the basis for the vessel’s profit
sharing. The remaining three Aframax tankers continue to trade in the
Aframax International Pool.
On August
8, 2008, the Company, in line with company policy, filed a shelf registration
with the SEC for a total of $200 million.
FINANCIAL
INFORMATION
SUMMARY
CONSOLIDATED STATEMENTS OF OPERATIONS
($ in
thousands except per share amounts)
|
|
2Q
2008
April
1 - June 30, 2008
|
|
|
2Q
2007
April
1-June 30, 2007
|
|
|
6
months
Jan.
1 - June
30,
2008
|
|
|
6
months
Jan.
1 - June
30,
2007
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Shipping
revenues
|
|
$ |
27,835 |
|
|
$ |
20,745 |
|
|
$ |
52,725 |
|
|
$ |
40,976 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Vessel
expenses
|
|
|
4,754 |
|
|
|
5,095 |
|
|
|
9,467 |
|
|
|
9,870 |
|
Depreciation
and amortization
|
|
|
6,537 |
|
|
|
4,217 |
|
|
|
12,730 |
|
|
|
8,388 |
|
General
and administrative
|
|
|
993 |
|
|
|
746 |
|
|
|
1,994 |
|
|
|
1,553 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
operating expenses
|
|
|
12,284 |
|
|
|
10,058 |
|
|
|
24,191 |
|
|
|
19,811 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income
from vessel operations
|
|
|
15,551 |
|
|
|
10,686 |
|
|
|
28,534 |
|
|
|
21,165 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
|
434 |
|
|
|
226 |
|
|
|
582 |
|
|
|
447 |
|
Interest
expense and amortization of deferred debt issuance cost
|
|
|
5,645 |
|
|
|
3,495 |
|
|
|
11,151 |
|
|
|
6,988 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
|
|
10,340 |
|
|
|
7,418 |
|
|
|
17,965 |
|
|
|
14,624 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
net income per share
|
|
$ |
0.29 |
|
|
$ |
0.25 |
|
|
$ |
0.55 |
|
|
$ |
0.49 |
|
Diluted
net income per share
|
|
$ |
0.29 |
|
|
$ |
0.25 |
|
|
$ |
0.55 |
|
|
$ |
0.49 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted
average number of shares (basic)
|
|
|
35,577,095 |
|
|
|
30,026,431 |
|
|
|
32,819,274 |
|
|
|
30,020,192 |
|
Weighted
average number of shares (diluted)
|
|
|
35,577,095 |
|
|
|
30,044,038 |
|
|
|
32,819,274 |
|
|
|
30,035,738 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SUMMARY
CONSOLIDATED BALANCE SHEETS
($ in
thousands)
|
|
June
30, 2008
|
|
|
Dec.
31, 2007
|
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
|
|
|
Cash
and Cash Equivalents
|
|
$ |
119,594 |
|
|
$ |
10,365 |
|
Voyage
receivables from OSG
|
|
|
5,239 |
|
|
|
1,547 |
|
Unrealized
gain on interest rate swap
|
|
|
|
|
|
|
|
|
Prepaid
Expenses
|
|
|
565 |
|
|
|
452 |
|
Prepaid
Technical Management Fee to OSG
|
|
|
1,357 |
|
|
|
1,357 |
|
Total
Current Assets
|
|
|
126,755 |
|
|
|
13,721 |
|
|
|
|
|
|
|
|
|
|
Vessels,
net
|
|
|
475,605 |
|
|
|
398,005 |
|
Other
assets incl. deferred debt issuance cost
|
|
|
1,243 |
|
|
|
1,337 |
|
Vessel
acquisition deposits
|
|
|
|
|
|
|
9,145 |
|
|
|
|
|
|
|
|
|
|
Total
Assets
|
|
$ |
603,603 |
|
|
$ |
422,208 |
|
|
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
|
|
|
|
|
Accounts
payable and accrued expenses
|
|
$ |
5,350 |
|
|
$ |
4,409 |
|
Unrealized
loss on interest rate swap
|
|
|
11,603 |
|
|
|
10,218 |
|
Deferred
shipping revenues
|
|
|
7,833 |
|
|
|
7,006 |
|
Current
portion of long term debt
|
|
|
75,000 |
|
|
|
75,000 |
|
Total
Current liabilities
|
|
|
99,786 |
|
|
|
96,633 |
|
|
|
|
|
|
|
|
|
|
Long
term debt
|
|
|
344,000 |
|
|
|
253,700 |
|
|
|
|
|
|
|
|
|
|
Total
Stockholders equity
|
|
|
159,817 |
|
|
|
71,875 |
|
|
|
|
|
|
|
|
|
|
Total
Liabilities and Stockholders' Equity
|
|
$ |
603,603 |
|
|
$ |
422,208 |
|
EARNINGS
CONFERENCE CALL INFORMATION
DHT plans
to host a conference call at 9 am ET on September 2, 2008 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 (866)
700-6067 within the United States and +1-617-213-8834 for international calls.
The passcode is “DHT Maritime”. A live webcast of the conference call will be
available in the Investor Relations section on DHT's website at http://www.dhtmaritime.com.
An audio
replay of the conference call will be available from 4:00 p.m. ET on September
2, 2008 through September 9, 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 43113410. A webcast of the replay will be available in the Investor
Relations section on DHT's website at http://www.dhtmaritime.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@dhtmaritime.com
and eu@tankersservices.com