DHT Holdings Inc (DHT) 2011 Q1 法說會逐字稿

Good day and welcome to the DHT's Q1 2011 earnings call. For your information, this call is being recorded. At this time I would like to turn the conference over to your host today, Mr. Uboe. Please go ahead, sir.

Thank you and good morning. Before we get started I would like to make the following brief remarks. This conference call is also being broadcast on our website, DHTankers.com, and a replay of this conference call will be available on the website. In addition, a Form 6-K evidencing this news release will be filed with the SEC.

As a reminder, this conference call contains forward-looking statements that are governed by the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements -- which include statements regarding DHT's prospects; the outlook for tanker market in general; expectations regarding daily charter hire rates and vessel utilization; forecasts of world economic activities; oil prices and oil trading patterns; expectations regarding seasonal fluctuations in tanker demand; anticipated levels of newbuilding and scrapping; and projected drydock schedules -- involve risks and uncertainties that are more fully described in our filings with the SEC. Actual results may differ materially from the expectations reflected in these forward-looking statements.

And with that out of the way, I would like to turn the call over to Svein Harfjeld, the CEO of DHT Holdings.

Thank you, Eirik. We have declared a cash dividend of $0.10 per share for the quarter. This dividend is payable on May 9, and this will be payable to shareholders of record as of April 29.

On the 21st of March we announced another acquisition, a 2002-built VLCC, for $67 million. This vessel will be delivered during the second quarter and will be renamed to DHT Eagle.

The vessel will enter into a 2-year time charter at $32,300 net per day. This acquisition is being financed with cash at hand and bank debt, in line with the general communicated plan for financing as we have stated earlier.

In February this year, we conducted an equity offering. This issued approximately 15.5 million shares with a net proceeds of $67.5 million to the Company.

Revenue for the quarter came in at $22.3 million and comprised of base hire only for the 9 vessels in operations during the quarter. These 9 vessels are on charters until the period between 2012 and 2018.

The DHT Phoenix, which was delivered on March 2, will enter the Tankers International pool during April this year. As such, no revenue for this vessel has occurred during the first quarter.

Net income for the quarter was $4 million, equal to $0.07 per share. Adjusted for non-cash interest rate swap-related items, net income for the quarter was $3.8 million or approximately $0.07 per share.

The vessel operating expenses for the quarter were $6.4 million including initial operating costs related to the DHT Phoenix, which was delivered on March 2. In this is also start-up costs which are being expensed for the vessel. Voyage-related expenses of $1.3 million related to bunker consumption, when we repositioned the newly acquired Phoenix to enter the TI pool.

G&A for the quarter was $2.4 million including non-cash costs related to restricted share agreements for management and Board. The G&A for the quarter includes a high level of activity during the quarter and project-specific costs related to capital raising, vessel inspections, vessel acquisitions, and move of Company offices.

Net financial expense of $1.3 million include a net non-cash gain on interest rate swaps of $0.3 million. Cash on hand at quarter-end was $102.2 million. This does not include the $6.7 million paid in deposit towards the acquisition of the DHT Eagle.

We will then open up for Q&A.

Operator? We are now ready for Q&A.

(Operator Instructions) Ken Hoexter, Merrill Lynch.

Thank you. Hi, guys. It's Scott Weber in for Ken this morning. Good morning.

Can you give us a sense for the approximate level of day rates that each class of the tankers earned in the pool during the quarter?

Well, the Tankers International pool has not yet reported earnings. Such that we understand from estimates from the two other companies that have ships in this VLCC pool, that earnings are expected to come in at about $24,000 a day. But as such we will not be using these numbers as we were not participating in the pool during that quarter.

Sure, okay.

As for the Aframax International pool, again we will only see those numbers when OSG reports at a later point in time, as we are not a direct participant in that pool.

Okay, got it. Then just to be clear, did the Phoenix immediately go into a survey or a drydocking? Or did it earn at all during March? Or can we assume that that enters the pool on April 1?

Well, we took delivery of the vessel on the 2nd of March, but the vessel only entered the pool on the 14th of April. So the pool typically then takes delivery of the ship in the Middle East Gulf; but we took delivery of the ship in California and have hence a significant ballast voyage to conduct before being able to deliver into the pool.

Sure, okay.

So then as such the Phoenix is only cost in Q1, but then no revenues. So this is slightly different to what the Eagle will experience when we take delivery of her in the second quarter. She will enter the time charter immediately or pretty much immediately upon delivery from the sellers.

Okay, terrific. Just from a market standpoint, do you still feel like secondhand purchases are the most attractive way to invest in the tanker market these days? Or would you consider a newbuild at all?

We are not considering newbuilding. So we are continuing to be active in inspecting secondhand assets. We feel that they are they are under pressure price-wise, so we hope to continue to invest during this trough and grow the Company.

Terrific. Thanks, guys.

(Operator Instructions) We don't have any further questions.

Okay.

Pardon, one question again from Ken Hoexter. Would you like to take it?

Yes, please.

Yes, just one more follow-up. For the vessels that are scheduled to go on special survey throughout the remainder of the year that you noted in the press release, how many days can we assume for each of those of off-hire?

For this calendar year we have 3 VLCCs due for a special survey, namely the Ann, the Chris, and the Eagle. We estimate -- or I think the industry in general estimates 30 days off-hire for these surveys. The industry also typically estimates $2.5 million to $3 million as expenditures or costs related to these surveys.

We have one each in second, third, and fourth quarter this year. Then furthermore, we have two Aframaxes due for intermediate survey in the fourth quarter this year, which is significantly less in terms of off-hire dates and costs.

Okay, great. Thanks, guys.

As there are no further questions I would like to turn the call over back to the host. Thank you.

Thank you all for listening in on our quarterly earnings call. I appreciate your interest in our Company and general support. Thank you.

Thank you very much, ladies and gentlemen. That will conclude today's conference call. Thank you for your participation. You may now disconnect.