SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 6-K

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16 under

the Securities Exchange Act of 1934

For the month of August 2016

Commission File Number 001-32640

DHT HOLDINGS, INC.

(Exact name of Registrant as specified in its charter)

Clarendon House

2 Church Street, Hamilton HM 11

Bermuda

 (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 ☑   Form 40-F ☐

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): _____

Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____

 

 

 

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The press release issued by DHT Holdings, Inc. (the “Company”) on August 9, 2016 related to its results for the second quarter of 2016 and its declaration of a quarterly dividend is attached hereto as Exhibit 99.1 and is incorporated herein by reference.

 

 

 

 

 

 

 

 

 

 

Exhibit List

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SIGNATURES

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.

DHT Holdings, Inc. second quarter 2016 results

HAMILTON, BERMUDA, August 9, 2016 – DHT Holdings, Inc. (NYSE:DHT) (“DHT” or the “Company”) today announced:

Financial and operational highlights:

Highlights of the quarter:

·	EBITDA for the quarter of $63.7 million and net income of $35.6 million ($0.38 per basic share).

·	The Company’s VLCCs operating in the spot market achieved time charter equivalent earnings of $53,340 per day in the second quarter of 2016.

·	The Company will pay a dividend of $0.23 per common share for the quarter payable on August 31, 2016 for shareholders of record as of August 24, 2016 which equates to 60% of net income.

·	During the quarter the company extended the time charter for the DHT Amazon to an oil major from mid-June 2016 until mid-October 2017 at a rate of $44,100 per day.

 

 

 

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¹ Net of voyage expenses.

 

 

·

In Q2 2016 the Company sold the DHT Target, a 2001 built Suezmax for $22.5 million and the vessel was delivered to the buyers in May 2016.  The sale is in support of the company's fleet renewal program and took place during a period in which four VLCC newbuildings have been delivered since November 2015 and two further VLCC newbuildings will be delivered by October 2016.

·

During the quarter the Company prepaid $16.1 million of bank debt and repurchased $1.0 million of its convertible senior notes due 2019 in the open market at a price of 99% of par.  Over the past twelve months, the Company has prepaid a total of $121.0 million of bank debt and repurchased a total of $4.0 million under the convertible senior notes.

·

On August 5, 2016 the Company took delivery of the fourth of its six VLCC newbuildings from Hyundai Heavy Industries (HHI).  The vessel is named the DHT Panther and is trading in the spot market.  A total of $43.5 million of debt was drawn in connection with the delivery. The remaining two newbuildings will be delivered in August and October 2016 and are expected to contribute meaningfully to the company's earnings power. The newbuildings are fully financed. Hence no new equity will be issued in connection with this fleet expansion.

·

DHT has a fleet of 20 VLCCs (including two under construction) and two Aframaxes. Of the 20 vessels in operation, six of the VLCCs and the two Aframaxes are on fixed rate time charters. For more details on the fleet, please refer to our web site: http://dhtankers.com/index.php?name=About_DHT%2FFleet.html.

We reported shipping revenues for the second quarter of 2016 of $98.7 million compared to shipping revenues of $82.9 million in the second quarter of 2015. The increase from the 2015 period to the 2016 period was due an increase in the fleet with the delivery of the VLCCs DHT Jaguar in November 2015, DHT Leopard in January 2016 and DHT Lion in March 2016 offset by the sale of the Suezmaxes DHT Trader in December 2015 and DHT Target in May 2016 as well as the extension of time charters at higher rates.

Voyage expenses for the second quarter of 2016 were $15.6 million, compared to voyage expenses of $14.8 million in the second quarter of 2015. The increase was mainly due to more vessels in the spot market offset by lower bunker cost in the 2016 period.

Vessel operating expenses for the second quarter of 2016 were $15.1 million, compared to $14.0 million in the second quarter of 2015. The increase was mainly due to increase in the fleet.

Depreciation and amortization, including depreciation of capitalized survey expenses, was $20.8 million for the second quarter 2016, compared to $19.4 million in the second quarter of 2015. The increase was mainly due to the delivery of the VLCCs DHT Jaguar in November 2015, DHT Leopard in January 2016 and DHT Lion in March 2016 offset by the sale of the Suezmaxes DHT Trader in December 2015 and DHT Target in May 2016.

General & administrative expense (“G&A”) for the second quarter 2016 was $4.3 million, consisting of $2.9 million cash and $1.4 million non-cash, compared to $4.5 million in the second quarter of 2015, consisting of $2.8 million cash and $1.7 million non-cash. Non-cash G&A includes accrual for social security tax.

 

 

 

Net financial expenses for the second quarter of 2016 were $7.5 million compared to $7.9 million in the second quarter of 2015. The decrease is mainly due to certain one-time effects in the second quarter of 2015, which included the expensing of the previously unamortized upfront fees related to the refinancing of the Samco Scandinavia, offset by lower fair value gain on derivative financial instruments.

We had net income in the second quarter of 2016 of $35.6 million, or $0.38 per basic share and $0.34 per diluted share, compared to net income of $22.2 million, or $0.24 per basic share and $0.22 per diluted share in the second quarter of 2015.

Net cash provided by operating activities for the second quarter of 2016 was $46.4 million compared to $41.2 million for the second quarter 2015.  The increase is mainly due to higher net income in the 2016 period due to an increase in the fleet offset by a larger increase in accounts receivables and accrued revenues in the 2016 period.

Net cash provided by investing activities was $7.5 million in the second quarter of 2016 of which $22.2 million related to the sale of DHT Target offset by $3.9 million related to capital expenditures for vessels undergoing special survey and drydocking and $10.8 million related to investment in vessels under construction. Net cash used in investing activities was $37.9 million in the second quarter of 2015 of which $30.0 related to investment in vessels under construction and $7.6 million related to the investment in Samco.

As of June 30, 2016, the Company had paid all pre-delivery installments totaling $141.4 million for the three newbuildings not yet delivered.  The Company has secured bank debt financing for these newbuildings totaling about 50% of the contract prices.

Net cash used in financing activities for the second quarter of 2016 was $66.4 million comprising $23.3 million related to cash dividend paid, $1.0 million related to the repurchase of its convertible senior notes and $42.0 million in repayment of long term debt. Net cash used in financing activities for the second quarter of 2015 was $42.7 million related to cash dividend paid and repayment of long term debt.

As of June 30, 2016, our cash balance was $65.0 million, compared to $166.8 million as of December 31, 2015.

We declared a cash dividend of $0.23 per common share for the second quarter of 2016 payable on August 31, 2016 for shareholders of record as of August 24, 2016.

We monitor our covenant compliance on an ongoing basis. As of the date of our most recent compliance certificates submitted for the second quarter of 2016, we remain in compliance with our financial covenants.

As of June 30, 2016, we had 93,366,062 shares of our common stock outstanding compared to 92,850,581 as of June 30, 2015.

We reported shipping revenues for the first half of 2016 of $206.3 million compared to $178.5 million in the first half of 2015. The increase from the 2015 period to the 2016 period was due an increase in the fleet with the delivery of the VLCCs DHT Jaguar in November 2015, DHT Leopard in January 2016 and DHT Lion in March 2016 offset by the sale of the Suezmaxes DHT Trader in December 2015 and DHT Target in May 2016 as well as the extension of time charters at higher rates.

 

 

 

Voyage expenses for the first half of 2016 were $32.9 million compared to voyage expenses of $37.0 million in the first half of 2015. The decrease was mainly due to lower bunker cost for the vessels in the spot market offset by more vessels in the spot market in the 2016 period.

Vessel operating expenses for the first half of 2016 were $29.4 million, compared to $29.1 million in the first half of 2015. The increase is mainly due to increase in the fleet.

Depreciation and amortization, including depreciation of capitalized survey expenses, was $41.5 million for the first half of 2016, compared to $39.0 million in the first half of 2015. The increase was mainly due to the delivery of the VLCCs DHT Jaguar in November 2015, DHT Leopard in January 2016 and DHT Lion in March 2016 offset by the sale of the Suezmaxes DHT Trader in December 2015 and DHT Target in May 2016.

G&A for the first half of 2016 was $10.8 million, consisting of $6.6 million cash and $4.2 million non-cash, compared to $12.0 million for the first half of 2015 consisting of $8.0 million cash and $4.0 million non-cash. For the first half of 2016 the cash G&A includes a non-recurring expense of $0.2 million related to reduction in staff and the non-cash G&A includes about $1.1 million related to restricted shares granted in January 2016 vesting in three tranches with the first tranche vesting in February 2016.

Net financial expenses for the first half of 2016 were $16.6 million, compared to $16.0 million in the first half of 2015.  The increase is mainly due to a non-cash finance expense of $0.9 million in the first half of 2016 related to unamortized upfront fees in connection with the prepayment of the credit facility for DHT Hawk and DHT Falcon offset by lower fair value gain on derivative financial instruments in the first half of 2016.

We had net income for the first half of 2016 of $67.1 million, or $0.72 per basic share and $0.64 per diluted share, compared to net income of $45.4 million, or $0.49 per basic share and $0.46 per diluted share in the first half of 2015.

Net cash provided by operating activities for the first half of 2016 was $105.3 million compared to $84.0 million for the first half of 2015.  The increase is mainly due to higher net income in the 2016 period due to an increase in the fleet offset by a larger increase in accounts receivables and accrued revenues in the 2016 period.

Net cash used in investing activities for the first half of 2016 was $107.8 million of which $3.9 million related to capital expenditures for vessels undergoing special survey and drydocking, $126.1 million related to investment in vessels under construction offset by $22.2 million related to the sale of DHT Target. Net cash used by investing activities for the first half of 2015 was $57.7 million of which $49.7 million related to pre-delivery installments for VLCC newbuildings ordered and $7.6 million related to the investment in Samco.

As of June 30, 2016, the Company had paid all pre-delivery installments totaling $141.4 million for the three newbuildings not yet delivered.  The Company has secured bank debt financing for these newbuildings totaling about 50% of the contract prices.

Net cash used in financing activities for the first half of 2016 was $99.2 million related to cash dividend paid, purchase of treasury shares, purchase of convertible bonds and repayment of long term debt offset by issuance of long term debt. Net cash used in financing activities for the first half of 2015 was $55.9 million related to cash dividend paid and repayment of long term debt.

 

 

As of June 30, 2016, our cash balance was $65.0 million, compared to $166.8 million as of December 31, 2015.

As of June 30, 2016, we had 93,366,062 shares of our common stock outstanding compared to 92,850,581 as of June 30, 2015.

Reconciliation of Non-GAAP financial measures ($ in thousands)

 

			Q2 2016				Q1 2016				Q4 2015				Q3 2015				Q2 2015				2015				2014
Reconciliation of Adjusted Net Revenue
Shipping revenues			98,738				107,555				94,647				91,962				82,870				365,114				150,789
Voyage expenses			(15,583	)			(17,306	)			(14,678	)			(17,224	)			(14,787	)			(68,864	)			(49,333	)
Adjusted Net Revenue			83,156				90,249				79,969				74,738				68,082				296,250				101,455
			Q2 2016				Q1 2016				Q4 2015				Q3 2015				Q2 2015				2015				2014
Reconciliation of EBITDA
Net income/(loss) after tax			35,597				31,531				32,428				27,464				22,186				105,302				12,887
Income tax expense			-				1				15				18				7				128				86
Other financial income/(expenses)			60				76				530				(77	)			185				487				1,150
Fair value gain/(loss) on derivative financial instruments			(681	)			58				(2,151	)			(48	)			(1,225	)			(3,603	)			(507	)
Interest expense			8,319				9,098				8,021				7,983				9,126				33,637				14,286
Interest income			(14	)			(20	)			(31	)			(30	)			(37	)			(141	)			(409	)
Share of profit from associated companies			(186	)			(121	)			(162	)			(107	)			(116	)			(467	)			(86	)
Profit/(loss), sale of vessel			(138	)			-				807				-				-				807				-
Reversal of impairment charges			-				-				-				-				-				-				(31,900	)
Depreciation and amortization			20,782				20,767				20,099				19,578				19,381				78,698				45,124
EBITDA			63,740				61,391				59,554				54,783				49,507				214,848				40,632

 

 

EARNINGS CONFERENCE CALL AND WEBCAST INFORMATION

The company will host a conference call and webcast which will include a slide presentation at 8:00 a.m. EDT/14:00 CEST on Wednesday August 10, 2016 to discuss the results for the quarter.  All shareholders and other interested parties are invited to join the conference call, which may be accessed by calling 1 212 444 0412 within the United States, 23500486 within Norway and +44 20 3427 1906 for international callers. The passcode is “DHT” or “486962”.

The webcast which will include a slide presentation will be available on the following link:

http://edge.media-server.com/m/p/xwhywsgk and can also be accessed in the Investor Relations section on DHT's website at http://www.dhtankers.com.

An audio replay of the conference call will be available through August 16, 2016.  To access the replay, dial 1 347 366 9565 within the United States, 21000498 within Norway or +44 20 3427 0598 for international callers and enter 486962# as the pass code.

About DHT Holdings, Inc.
DHT is an independent crude oil tanker company. Our fleet trades internationally and consists of crude oil tankers in the VLCC and Aframax segments. We operate through our integrated management companies in Oslo, Norway and Singapore. You shall recognize us by our business approach with an experienced organization with focus on first rate operations and customer service, quality ships built at quality shipyards, prudent capital structure with robust cash break even levels to accommodate staying power through the business cycles, a combination of market exposure and fixed income contracts for our fleet and a transparent corporate structure maintaining a high level of integrity and good governance.  For further information: www.dhtankers.com.

 

 

 

This press release contains certain forward-looking statements and information relating to the Company that are based on beliefs of the Company's management as well as assumptions, expectations, projections, intentions and beliefs about future events, in particular regarding dividends (including our dividend plans, timing and the amount and growth of any dividends), daily charter rates, vessel utilization, the future number of newbuilding deliveries, 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 reflect the Company's current views with respect to future events and are based on assumptions and subject to risks and uncertainties.  Given these uncertainties, you should not place undue reliance on these forward-looking statements.  These forward-looking statements represent the Company's estimates and assumptions only as of the date of this press release and are not intended to give any assurance as to future results.  For a detailed discussion of the risk factors that might cause future results to differ, please refer to the Company's Annual Report on Form 20-F, filed with the Securities and Exchange Commission on March 21, 2016.

The Company undertakes no obligation to publicly update or revise any forward-looking statements contained in this press release, whether as a result of new information, future events or otherwise, except as required by law.  In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this press release might not occur, and the Company's actual results could differ materially from those anticipated in these forward-looking statements.

 

DHT HOLDINGS, INC.

UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

AS OF JUNE 30, 2016

 

 

 

 

 

 

 

 

DHT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION (UNAUDITED)

($ in thousands except per share amounts)

 

ASSETS	Note			June 30, 2016				December 31, 2015
Current assets
Cash and cash equivalents				$	65,049				166,775
Accounts receivable and accrued revenues	8				52,889				40,093
Prepaid expenses					4,117				2,540
Bunkers, lube oils and consumables					8,425				8,844
Total current assets				$	130,481				218,251
Non-current assets
Vessels and time charter contracts	5			$	1,113,956				986,597
Advances for vessels under construction	5				146,431				215,401
Other property, plant and equipment					683				579
Investment in associated company					3,205				2,976
Total non-current assets				$	1,264,275				1,205,553
Total assets				$	1,394,755				1,423,805
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable and accrued expenses				$	8,768				13,935
Derivative financial liabilities					3,224				3,058
Current portion long term debt	4				31,083				32,267
Deferred shipping revenues					3,537				3,575
Total current liabilities				$	46,612				52,835
Non-current liabilities
Long term debt	4			$	582,057				630,201
Derivative financial liabilities					2,087				2,876
Total non-current liabilities				$	584,144				633,077
Total liabilities				$	630,756				685,912
Stockholders' equity
Stock	6, 7			$	934				929
Additional paid-in capital	6, 7				881,509				878,236
Accumulated deficit					(123,937	)			(147,945	)
Translation differences					(214	)			(232	)
Other reserves					5,708				6,904
Total stockholders equity				$	763,999				737,893
Total liabilities and stockholders' equity				$	1,394,755				1,423,805

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

 

 

DHT HOLDINGS, INC.

CONDENSED CONSOLIDATED INCOME STATEMENT (UNAUDITED)

($ in thousands except per share amounts)

 

 

				2Q 2016				2Q 2015					1H 2016				1H 2015
	Note			Apr. 1 - Jun. 30 2016				Apr. 1 - Jun. 30 2015				Jan. 1 - Jun. 30, 2016				Jan. 1 - Jun. 30, 2015
Shipping revenues				$	98,738				82,870			$	206,293				178,505
Operating expenses
Voyage expenses					(15,583	)			(14,787	)			(32,889	)			(36,962	)
Vessel operating  expenses					(15,079	)			(14,038	)			(29,366	)			(29,058	)
Depreciation and amortization	5				(20,782	)			(19,381	)			(41,549	)			(39,021	)
Impairment charge vessel held for sale	5				-				-				(8,100	)			-
Reversal of impairment charges	5				-				-				-				-
Profit/(loss), sale of vessel	5				138				-				138				-
General and administrative expense					(4,337	)			(4,538	)			(10,808	)			(11,973	)
Total operating expenses				$	(55,643	)			(52,744	)		$	(122,574	)			(117,014	)
Operating income				$	43,095				30,126			$	83,719				61,491
Share of profit from associated companies					186				116				307				198
Interest income					14				37				34				79
Interest expense					(8,319	)			(9,126	)			(17,418	)			(17,633	)
Fair value gain/(loss) on derivative financial instruments					681				1,225				622				1,404
Other financial income/(expenses)					(60	)			(185	)			(137	)			(34	)
Profit/(loss) before tax				$	35,597				22,193			$	67,128				45,505
Income tax expense					-				(7	)			(1	)			(96	)
Net income/(loss) after tax				$	35,597				22,186			$	67,127				45,409
Attributable to the owners of parent				$	35,597				22,186			$	67,127				45,409
Basic net income/(loss) per share					0.38				0.24				0.72				0.49
Diluted net income/(loss) per share					0.34				0.22				0.64				0.46
Weighted average number of shares (basic)					93,366,062				92,850,581				93,395,540				92,730,185
Weighted average number of shares (diluted)					114,349,521				111,965,050				113,995,737				111,645,098
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
Profit for the period				$	35,597				22,186			$	67,127				45,409
Other comprehensive income:
Items that will not be reclassified to income statement:
Remeasurement of defined benefit obligation (loss)					-				-				(41	)			(204	)
Total				$	-				-			$	(41	)			(204	)
Items that may be reclassified to income statement:
Exchange gain (loss) on translation of foreign currency
denominated associate and subsidiary					(83	)			(27	)			64				(296	)
Total				$	(83	)			(27	)		$	64				(296	)
Other comprehensive income				$	(83	)			(27	)		$	23				(500	)
Total comprehensive income for the period				$	35,514				22,158			$	67,151				44,910
Attributable to the owners of parent				$	35,514				22,158			$	67,151				44,910

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

DHT HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW (UNAUDITED)

($ in thousands)

					Q2 2016				Q2 2015				1H 2016				1H 2015
	Note			Apr. 1 - Jun. 30, 2016				Apr. 1 - Jun. 30, 2015				Jan. 1 - Jun. 30, 2016				Jan. 1 - Jun. 30, 2015
Cash flows from operating activities:
Net income/(loss)					35,597				22,186				67,127				45,409
Items included in net income not affecting cash flows:
Depreciation	5				20,782				19,381				41,549				39,021
Impairment charge vessel held for sale	5				-				-				8,100				-
Amortization of debt issuance costs					1,657				2,503				4,286				4,213
(Profit)/loss, sale of vessel	5				(138	)			-				(138	)			-
Fair value (gain)/loss on derivative financial instruments					(681	)			(1,225	)			(622	)			(1,404	)
Compensation related to options and restricted stock					1,335				1,554				4,669				3,773
Share of profit in associated companies					(186	)			(116	)			(307	)			(198	)
Unrealized currency translation lossess/(gains)					-				(12	)			(208	)			24
Changes in operating assets and liabilities:
Accounts receivable and accrued revenues	8				(10,956	)			(3,210	)			(12,796	)			(4,498	)
Prepaid expenses					1,075				(934	)			(1,577	)			(1,290	)
Accounts payable and accrued expenses					1,475				1,585				(5,167	)			(8,413	)
Deferred shipping revenues					(1,542	)			(690	)			(38	)			1,531
Bunkers, lube oils and consumables					(2,065	)			192				418				5,815
Net cash provided by operating activities					46,354				41,215				105,297				83,984
Cash flows from investing activities:
Investment in vessels					(3,910	)			-				(3,910	)			(44	)
Investment in vessels under construction	5				(10,779	)			(30,040	)			(126,103	)			(49,692	)
Sale of vessels					22,233				-				22,233				-
Investment in subsidiary, net cash					-				(7,562	)			-				(7,562	)
Investment in property, plant and equipment					(5	)			(284	)			(15	)			(428	)
Net cash provided by/(used in) investing activities					7,539				(37,886	)			(107,795	)			(57,725	)
Cash flows from financing activities
Cash dividends paid	7				(23,342	)			(13,928	)			(43,024	)			(18,553	)
Issuance of long term debt	4				(58	)			-				45,618				-
Purchase of treasury shares	7				-				-				(2,031	)			-
Purchase of convertible bonds	6				(983	)			-				(4,019	)			-
Repayment of long-term debt	4				(41,994	)			(28,769	)			(95,772	)			(37,312	)
Net cash used in financing activities					(66,376	)			(42,697	)			(99,227	)			(55,865	)
Net increase/(decrease) in cash and cash equivalents					(12,484	)			(39,368	)			(101,725	)			(29,606	)
Cash and cash equivalents at beginning of period					77,533				176,446				166,775				166,684
Cash and cash equivalents at end of period					65,049				137,077				65,049				137,077
Specification of items included in operating activities:
Interest paid					5,714				4,938				26,505				13,745
Interest received					14				32				140				79

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

DHT HOLDINGS, INC.

SUMMARY CONSOLIDATED STATEMENT OF CHANGES
IN SHAREHOLDERS’ EQUITY (UNAUDITED)

($ in thousands except shares)

 

											Paid-in
											Additional				Retained				Translation				Other				Total
	Note		Shares				Stock				Capital				Earnings				Differences				Reserves				Equity
Balance at January 1, 2015				92,510,086			$	925			$	873,522			$	(204,011	)		$	(296	)		$	4,712			$	674,851
Net income/(loss) after tax																45,409												45,409
Other comprehensive income																				(119	)							(119	)
Total comprehensive income																45,409				(119	)							45,290
Cash dividends declared and paid																(18,553	)											(18,553	)
Compensation related to options and restricted stock				340,495				3																3,769				3,773
Balance at June 30, 2015				92,850,581			$	929			$	873,522			$	(177,155	)		$	(415	)		$	8,481			$	705,361
											Paid-in
											Additional				Retained				Translation				Other				Total
	Note		Shares				Stock				Capital				Earnings				Differences				Reserves				Equity
Balance at January 1, 2016				92,909,936			$	929			$	878,236			$	(147,945	)		$	(232	)		$	6,904			$	737,893
Net income/(loss) after tax																67,127												67,127
Other comprehensive income																(95	)			18								(78	)
Total comprehensive income																67,032				18								67,049
Cash dividends declared and paid																(43,024	)											(43,024	)
Purchase of treasury shares				(359,831	)			(4	)			(2,027	)															(2,031	)
Purchase of convertible bonds												(558	)															(558	)
Compensation related to options and restricted stock				815,957				8				5,858												(1,197	)			4,669
Balance at June 30, 2016				93,366,062			$	934			$	881,509			$	(123,937	)		$	(214	)		$	5,708			$	763,999

 

 

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

 

NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS FOR THE PERIOD ENDED JUNE 30, 2016

Note 1 – General information

DHT Holdings, Inc. (“DHT” or the “Company”) is a company incorporated under the laws of the Marshall Islands whose shares are listed on the New York Stock Exchange. The Company’s principal executive office is located at Clarendon House, 2 Church Street, Hamilton HM 11, Bermuda. The Company is engaged in the ownership and operation of a fleet of crude oil carriers.

The financial statements were approved by the Company’s Board of Directors (the “Board”) on August 8, 2016 and authorized for issue on August 9, 2016.

Note 2 – General accounting principles

The condensed consolidated interim financial statements do not include all information and disclosure required in the annual financial statements and should be read in conjunction with DHT’s audited consolidated financial statements included in its Annual Report on Form 20-F for 2015. Our interim results are not necessarily indicative of our results for the entire year or for any future periods.

The condensed financial statements have been prepared in accordance with IAS 34 “Interim Financial Reporting” as issued by the International Accounting Standards Board (“IASB”).

The condensed financial statements have been prepared on a historical cost basis, except for derivative financial instruments that have been measured at fair value. The accounting policies that have been followed in these condensed financial statements are the same as presented in the 2015 audited consolidated financial statements.

Non-current assets held for sale

Non-current assets are classified separately as held for sale in the statement of financial position when their carrying amount will be recovered through a sale transaction rather then continuing use. This condition is regarded as met only when the sale is highly probable, the asset is available for immediate sale in its present condition, and management is committed to the sale, which should be expected to qualify for recognition as a completed sale within one year from the date of classification.

Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair value less cost to sell.

These interim financial statements have been prepared on a going concern basis.

Changes in accounting policy and disclosure

New and amended standards, and interpretations mandatory for the first time for the financial year beginning January 1, 2016 but not currently relevant to DHT (although they may affect the accounting for future transactions and events). The adoption did not have any effect on the financial statements:

 

IFRS 14	Regulatory Deferral Accounts
Amendments to IFRS 11	Accounting for Acquisitions of Interests in Joint Operations
Amendments to IAS 1	Disclosure Initiative
Amendments to IAS 16 and IAS 38	Clarification of Acceptable Methods of Depreciation and Amortization
Amendments to IFRS 10 and IAS 28	Sale of Contribution of Assets between an Investor and its Associate and Joint Venture
Amendments to IFRS 10, IFRS 12 and IAS 28	Investments Entities: Applying the Consolidation Exception

 

 

 

Note 3 – Segment reporting

Since DHT’s business is limited to operating a fleet of crude oil tankers, management has organized the entity as one segment based upon the service provided. Consequently, the Company has one operating segment as defined in IFRS 8, Operating Segments.

Information about major customers:

As of June 30, 2016, the Company had 19 vessels in operation; eight vessels were on fixed rate time charters and 11 vessels operating in the spot market. For the period from April 1, 2016 to June 30, 2016 five customers represented $15.5 million, $10.7 million, $10.7 million, $8.5 million and $8.3 million, respectively, of the Company’s revenues. For the period from April 1, 2015 to June 30, 2015 five customers represented $33.1 million, $11.5 million, $6.6 million, $6.2 million and $5.4 million, respectively, of the Company’s revenues.

Note 4 – Interest bearing debt

As of June 30, 2016, DHT had interest bearing debt totaling $613.1 (including the $146 million convertible senior notes).

Scheduled debt repayments (USD million) and margin above Libor

 

 

	Q3	Q4						Margin
	2016	2016	2017	2018	2019	Thereafter	Total	above Libor
RBS Credit Facility*	-	-	47.5	-		-	47.5	1.75%
ABN Amro/Nordea/DVB	0.7	0.7	2.8	2.8	2.8	36.6	46.3	2.60%
Nordea/DNB/DVB syndicate	5.1	5.1	20.4	20.4	220.2	-	271.3	2.50%
Credit Agricole - Samco Scandinavia	1.0	1.0	3.9	3.9	3.9	15.6	29.2	2.19%
Danish Ship Finance - DHT Jaguar	-	1.3	2.6	2.6	2.6	39.0	48.1	2.25%
Nordea/DNB - DHT Leopard	0.6	0.6	2.5	2.5	2.5	40.0	48.8	2.25%
Convertible Note					146.0	-	146.0
Total	7.4	8.7	79.7	32.2	378.0	131.2	637.2
Unamortized upfront fees bank loans							(6.1)
Difference amortized cost/notional amount convertible note							(17.9)
Total interest bearing debt							613.1

 

*Commencing with the second quarter of 2016, subject to a free cash flow calculation, we are required to pay installments under the RBS credit facility equal to free cash flow (after adjusting for capital expenditures for the next two quarters) for DHT Maritime, Inc. during the preceding quarter, capped at $7.5 million per quarter.

In April 2013 the Company’s wholly owned subsidiary, DHT Maritime, Inc., amended its credit agreement with the Royal Bank of Scotland (“RBS”) whereby the minimum value covenant has been removed in its entirety. Furthermore, the installments scheduled to commence in 2016 have been changed from a fixed $9.1 million per quarter to a variable amount equal to free cash flow in the prior quarter – capped at $7.5 million with the first payment to take place in the second quarter of 2016 based on free cash flow in the first quarter of 2016. Free cash flow is defined as an amount calculated as of the last day of each quarter equal to the positive difference, if any, between: the sum of the earnings of the vessels during the quarter and the sum of ship operating expenses, voyage expenses, estimated capital expenses for the following two quarters, general & administrative expenses, interest expenses and change in working capital. In May 2016 we paid an installment of $5.5 million based on free cash flow in the first quarter of 2016. As of June 30, 2016 the total outstanding under the RBS credit facility is $47.5 million with final maturity in July 2017. In April 2013 the Company made a prepayment of $25 million and the margin was increased to 1.75%. DHT Maritime’s financial obligations under the credit agreement are guaranteed by DHT Holdings, Inc. In connection with the prepayment of the DHT Phoenix, DHT Eagle and DHT Hawk/DHT Falcon credit facilities in June 2015, October 2015 and February 2016, respectively, we were required to prepay $2.9 million, $3.9 million and $4.9 million, respectively, under the RBS facility (a proportionate amount of the RBS facility relative to the Company’s total debt). In connection with the sale of the DHT Trader in December 2015, we repaid $26.0 million under the RBS facility and in connection with the sale of the DHT Target we repaid $22.3 million in May 2016.

 

 

ABN Amro/Nordea/DVB – three newbuildings

In July 2014 we entered into a credit facility totaling $141.0 million with ABN Amro, Nordea and DVB as lenders and DHT Holdings, Inc. as guarantor for the financing of three VLCC newbuildings.  With respect to each newbuilding each borrower is permitted to borrow an amount equal to the lower of $47.0 million per vessel and 50% of the estimated market value for each vessel at delivery. The drawdown of the first tranche under the credit facility totaling $47.0 million took place in March 2016 in connection with the delivery of the DHT Lion from HHI.  Borrowings bear interest at a rate equal to Libor + 2.60% and each tranche is repayable in 20 quarterly installments of $0.7 million and a final payment of $33.2 with the last installment (assuming borrowings of $47.0 million per tranche). In addition to the instalments and balloon payments described above, each borrower shall the first three years make additional repayments of a variable amount equal to free cash flow in the prior quarter capped at $0.3 million per quarter to be applied against the balloon. Free cash flow is defined as an amount calculated as of the last day of each quarter equal to the positive difference, if any, between (a) the sum of the earnings of the vessels during the quarter and (b) the sum of ship operating expenses, voyage expenses, estimated capital expenses for the following two quarters, general & administrative expenses, interest expenses and change in working capital.

The credit facility contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·

value adjusted* tangible net worth of $100 million

·

value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·

unencumbered consolidated cash of at least the higher of (i) $20 million and (ii) 6% of our gross interest bearing debt

*value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

In December 2014 we entered into a credit facility totaling $302.0 million with Nordea, DNB and DVB as lenders, and DHT Holdings, Inc. as guarantor for the re-financing of the financing of Samco Europe, Samco China, Samco Amazon, Samco Redwood, Samco Sundarbans and Samco Taiga as well as the financing of the DHT Condor.  Borrowings bear interest at a rate equal to Libor + 2.50% and are repayable in 20 quarterly installments of $5.1 million from March 2015 to December 2019 and a final payment of $199.8 million in December 2019. The credit facility is guaranteed by DHT and contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·

value adjusted* tangible net worth of $200 million

·

value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·

unencumbered consolidated cash of at least the higher of (i) $20 million and (ii) 6% of our gross interest bearing debt

*value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

 

 

Credit Agricole - Samco Scandinavia and DHT Tiger
In June 2015 Samco Gamma Ltd and DHT Tiger Limited entered into a credit agreement with Credit Agricole for the financing of the Samco Scandinavia and the newbuilding DHT Tiger expected to be delivered in October 2016.  In June 2016 we made a voluntary prepayment of $5.0 million and as of June 30, 2016 the total outstanding under the Credit Agricole credit facility is $29.2 million related to the Samco Scandinavia.  Subsequent to the prepayment of $5.0 million, the financing of the Samco Scandinavia is repayable with 30 quarterly installments of $0.97 million each. The loan bears interest at Libor plus a margin of 2.1875% and includes a covenant that the charter-free value of the vessel shall be at least 135%.  The credit facility is guaranteed by DHT and contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·

value adjusted* tangible net worth of $200 million

·

value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·

unencumbered consolidated cash of at least the higher of (i) $20 million and (ii) 6% of our gross interest bearing debt.

*value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

In November 2014 we entered into a credit facility totaling $49.4 million with Danish Ship Finance (“DSF”) as lender and DHT Holdings, Inc. as guarantor for the financing of the VLCC newbuilding DHT Jaguar delivered in Q4 2015.  The full amount of the credit facility was drawn in November 2015.  Borrowings bear interest at a rate equal to Libor + 2.25% and are repayable in 10 semiannual installments of $1.3 million from May 2016 to November 2020 and a final payment of $36.4 million in November 2020. The credit facility is guaranteed by DHT and contains a covenant requiring that at all times the charter-free market value of the vessel that secure the credit facility be no less than 130% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·

value adjusted* tangible net worth of $200 million

·

value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·

unencumbered consolidated cash of at least the higher of (i) $20 million and (ii) 6% of our gross interest bearing debt

*value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

 

 

 

In October 2015 we entered into a credit facility totaling $50.0 million with Nordea and DNB as lenders and DHT Holdings, Inc. as guarantor for the financing of the VLCC newbuilding DHT Leopard delivered in Q1 2016.  The full amount of the credit facility was drawn on December 29, 2015 in advance of the delivery of the DHT Leopard on January 4, 2016.  Borrowings bear interest at a rate equal to Libor + 2.25% and are repayable in 20 quarterly installments of $0.625 million from March 2016 to December 2020 and a final payment of $37.5 million in December 2020. The credit facility is guaranteed by DHT and contains a covenant requiring that at all times the charter-free market value of the vessels that secure the credit facility be no less than 135% of borrowings. Also, DHT covenants that, throughout the term of the credit facility, DHT, on a consolidated basis, shall maintain:

·

value adjusted* tangible net worth of $200 million

·

value adjusted* tangible net worth shall be at least 25% of value adjusted total assets

·

unencumbered consolidated cash of at least the higher of (i) $20 million and (ii) 6% of our gross interest bearing debt

*value adjusted defined as an adjustment to reflect the difference between the carrying amount and the market valuations of the Company’s vessels (as determined quarterly by an approved broker).

 

In February 2016 we repurchased $3.0 million of the convertible senior notes in the open market at a price of 99% of par and in April 2016 we repurchased $1.0 million of the convertible senior notes in the open market at a price of 99% of par.

The Company has entered into firm commitments for the debt financing of all six of its newbuildings ordered at HHI, of which the financing for three of the newbuildings had been drawn as of June 30, 2016. The financings, which are drawn at delivery of each of the vessels, equals about 50% of the contract prices with an average margin above Libor of 2.4%.

As of the date of our most recent compliance certificates submitted to the banks, we remain in compliance with our financial covenants.

As of June 30, 2016, DHT has six interest rate swaps totaling $176.6 million with maturity ranging from the fourth quarter of 2016 to the second quarter of 2018.  The fixed interest rates range from 2.43% to 3.57%.  As of June 30, 2016, the fair value of the derivative financial liability related to the swaps amounted to $5.3 million.

Note 5 – Vessels

The carrying values of our vessels may not represent their fair market value at any point in time since the market prices of second-hand vessels tend to fluctuate with changes in charter rates and the cost of constructing new vessels. Historically, both charter rates and vessel values have been cyclical. The carrying amounts of vessels held and used by us are reviewed for potential impairment or reversal of prior impairment charges whenever events or changes in circumstances indicate that the carrying amount of a particular vessel may not accurately reflect the recoverable amount of a particular vessel. The Company is of the view that there were no events or changes in circumstances indicating that the carrying amount of a particular vessel may not accurately reflect the recoverable amount of a particular vessel as of June 30, 2016.

 

 

 

Cost of Vessels					Depreciation, impairment and amortization*
At January 1, 2016		$	1,341,581		At January 1, 2016		$	354,984
Additions			1,965		Depreciation and amortization			41,429
Transferred from					Retirement			(38,880	)
vessels under construction			194,858		At June 30, 2016		$	357,533
Retirement **			(66,915	)
At June 30, 2016		$	1,471,489
Carrying Amount
At January 1, 2016		$	986,597
At June 30, 2016		$	1,113,956

 

*Accumulated numbers

**Relates to completed depreciation of drydocking for DHT Ann and DHT Amazon, sale of DHT Target and completed amortization of time charter contract for Samco Taiga and Samco Sundarbans.

We have entered into agreements with HHI for the construction of six VLCCs, of which three vessels were delivered in November 2015, January 2016 and March 2016.  As of June 30, 2016 we have paid pre-delivery installments totaling $141.4 million for the three remaining newbuildings to be delivered in 2016. Borrowing costs are capitalized as part of vessels under construction.

 

Cost of vessels under construction
At January 1, 2016		$	215,401
Additions			125,888
Transferred to vessels			(194,858	)
At June 30, 2016		$	146,431
Carrying Amount
At January 1, 2016		$	215,401
At June 30, 2016		$	146,431

 

The following table is a timeline of future expected payments and dates relating to vessels under construction as of June 30, 2016*:

Vessels under construction (USD million)		Jun. 30, 2016				Jan. 1, 2016
Not later than one year			141.4				266.2
Later than one year and not later than three years			0.0				0.0
Later than three years and not later than five years			0.0				0.0
Total			141.4				266.2

 

*These are estimates only and are subject to change as construction progresses.

 

Note 6 – Equity and Convertible Bond Offerings

Convertible Senior Note Offering

On September 16, 2014 we completed a private placement of $150 million aggregate principal amount of convertible senior notes due 2019 (the "Notes"). DHT will pay interest at a fixed rate of 4.5% per annum, payable semiannually in arrears. Net proceeds to DHT were approximately $145.9 million after the payment of placement agent fees. The value of the conversion right has been estimated to $21.8 million; hence $21.8 million of the aggregate principal amount of $150.0 million was classified as equity. The Notes will be convertible into common stock of DHT at any time after placement until one business day prior to their maturity. The initial conversion price was $8.125 per share of common stock (equivalent to 18,461,538 shares of common stock), and is subject to customary anti-dilution adjustments. As a result of the cumulative effect of previously announced cash dividends, the conversion price was adjusted to $6.9651 effective May 12, 2016. Based on the adjusted conversion price and after adjusting for the repurchase of $4.0 million of the convertible senior notes in the open market at a price of 99% of par, the total number of shares to be issued would be 20,961,652.

We have concluded that the adjustment of the conversion rate upon the payment of cash dividends does not result in an accounting entry as the liability and equity components of the instrument are not re-measured as a result of the cash dividend. This is based on the fact that we have determined that the Notes are non-derivative financial instruments that contain both liability and equity components. The financial liability is the contractual obligation to make interest and principal payments and the equity component is the right of the holders of the Notes to convert the Notes into a fixed number of the Company’s common shares. In accordance with IAS 32, the liability component was measured first and is recorded at its amortized cost over the life of the instrument. The equity component was assigned the residual amount after deducting the amount separately determined for the liability component. The equity component was recorded as part of additional paid-in capital and is never re-measured.

The determination that the conversion feature is an equity instrument (rather than a derivative liability accounted for under IAS 39) was made on the basis that there is no variability in the number of equity instruments delivered upon conversion (i.e. the exchange meets the “fixed for fixed” requirements set forth under IAS 32). In making the determination, the Company considered that the Notes contain a mechanism whereby the conversion rate of the Notes is adjusted for cash dividends paid by the Company. Although this adjustment results in variability in the number of common shares delivered, the fact that this variability serves to maintain the relative economic rights of the holders of the Notes results in no violation of the “fixed for fixed” requirement.

Note 7 – Stockholders equity and dividend payment

 

		Common stock	Preferred stock
Issued at June 30, 2016		93,366,062	-
Shares to be issued assuming conversion of
convertible notes*		26,009,352
Numbers of shares authorized for issue
at June 30, 2016		150,000,000	1,000,000
Par value		$ 0.01	$ 0.01

*assuming the maximum fundamental change conversion rate.

 

Common stock:

Each outstanding share of common stock entitles the holder to one vote on all matters submitted to a vote of stockholders.

Preferred stock:

Terms and rights of preferred shares will be established by the board when or if such shares would be issued.

In March 2016 we purchased 359,831 shares of DHT common stock in the open market at an average price of $5.64 per share. The shares were retired in April 2016.

 

 

Dividend payment:
Dividend payment as of June 30, 2016:
Payment date:		Total payment	Per common share
May 25, 2016		$ 23.3 million	$0.25
February 24, 2016		$ 19.7 million	$0.21
Total payment as of June 30, 2016:		$ 43.0 million	$0.46
Dividend payment:
Dividend payment as of Dec. 31, 2015:
Payment date:		Total payment	Per common share
November 25, 2015		$ 16.7 million	$0.18
August 20, 2015		$ 13.9 million	$0.15
May 22, 2015		$ 13.9 million	$0.15
February 19, 2015		$ 4.6 million	$0.05
Total payment as of Dec. 31, 2015:		$ 49.2 million	$0.53

 

Note 8 – Accounts receivable and accrued revenues

Accounts receivable and accrued revenues totaling $52.9 million as of June 30, 2016 consists mainly of earned freight not received of $12.8 million and accounts receivable of $40.1 million with no material amounts overdue.

Note 9 - Financial risk management, objectives and policies

Note 10 in the 2015 annual report on Form 20-F provides for details of financial risk management objectives and policies.

The Company’s principal financial liability consists of long-term debt with the main purpose being to partly finance the Company’s assets and operations. The Company’s financial assets mainly comprise cash. The Company is exposed to market risk, credit risk and liquidity risk. The Company’s senior management oversees the management of these risks.

Note 10 – Subsequent Events

On August 8, 2016 the Board approved a dividend of $0.23 per common share related to the second quarter 2016 to be paid on August 31 2016 for shareholders of record as of August 24, 2016.

On August 5, 2016 the Company took delivery of the fourth of its six VLCC newbuildings from Hyundai Heavy Industries (HHI).  The vessel is named the DHT Panther and is trading in the spot market.  A total of $43.5 million of debt was drawn in connection with the delivery.