DHT Holdings, Inc. Q4 FY2025 earnings call

• Entered into an agreement in June 2024 to acquire DHT Nokota, a 2018-built VLCC, delivered in November. - Sold DHT China and DHT Europe for $101.6 million, expecting a combined gain of ~$60 million in Q1. - Took delivery of first newbuilding DHT Antelope on January 2, with remaining 3 newbuildings to deliver in March and June. - Extended time-charter for DHT Harrier with a 5-year contract, option to extend further. - Agreed to sell DHT Bauhinia for $51.5 million, expecting a gain of $34.2 million. - Deployed $97.6 million towards vessels during the quarter, including delivery of DHT Nokota and newbuildings.

In the fourth quarter of 2025, DHT Holdings achieved TCE revenues of $118 million and adjusted EBITDA of $95 million. Net income was $66 million, equal to $0.41 per share. For the full year 2025, TCE revenues were $369 million, adjusted EBITDA was $278 million, and net income was $211 million, equal to $1.31 per share. Vessels in the spot market earned an average of $69,500 per day, while time-chartered vessels achieved $49,400 per day. The fleet's average combined TCE was $60,300 per day. The balance sheet was strong with low leverage and strong liquidity, ending Q4 with $79 million in cash and $171.9 million available under revolving credit facilities.

• Expected to book ~$60 million gain from sale of DHT China and DHT Europe in Q1. - Spot market exposure to reach ~3/4 of capacity during Q2. - Estimated spot cash breakeven for 2026 at $17,500 per day. - Anticipated 797 time-charter days covered and 1,195 spot days for Q1 2026, with spot P&L breakeven estimated at $18,300 per day.

• Uncertainty regarding the resolution of protocols for demolition of noncompliant fleet. - Potential material differences between forward-looking statements and actual results. - Geopolitical factors impacting oil transportation and market dynamics, such as unresolved issues with sanctioned oil markets and vessel compliance.

Q: Putting Slides 11 and 12 together, the commentary about the consolidation and then increasing spot exposure to 74%. The comment on the aggregator and charters looking for reliability and the premium associated with that. When I first read that in the press release last night, it sounded like that was conducive to a much stronger time-charter market. And we saw one of your Norwegian peers sign 8 ships at absurd time-charter numbers, lacking a better term. So can you help us kind of reconcile those? Do you think that there's going to be other opportunities like that even better than what you just renew the Harrier at. So that spot market exposure increase may be kind of short term?

A: I can confirm that. So I would say, basically, all end users or customers now are in the market to secure time-charters and for a variety of tenors, mostly 1, 2 or 3 years. And the rates that they are being offered are above last bump. And the aggregator, so to speak, is not really in the market to offer ships for time-charter, at least not as we have seen and we doubt that it is happening. So it's really the remainder of owners that potentially will consider this. And I think today, there are rumors of a 1-year charter at $85,000 a day. So we'll have to see if that happens. But that, I think, is on subs apparently. So that's a reflection of a step-up from the last one on 1 year. And also, we are aware of customers bidding on 3-year charters, certainly at numbers quite above what you would assume to be last on. So I think in general, customers are a bit worried about reliability and not really having access to ships or potentially be held hostage to a market where ships are being held back for some reason, right? So it's a very interesting dynamic, and it's already sort of taking shape. So we already see the contours of how this is working out.

Q: On this aggregators controlling 25%, can you maybe translate that into a vessel count or maybe clarify how you define the compliance fleet? Because when I look at 130, 120 ships, that's just like probably 18% or something like that. So just a clarification on that first.

A: Yes. So you have to knock off the sanction fleet, obviously, right, which is not really a market business. Then, there are quite significant number of ships that are state-owned controlled and that are really just running a shuttle service, basically a taxi service for their owners. So China Inc. for one, they control roughly 100 VLCCs, and quite a significant portion of that fleet is engaged in transporting oil as a cargo services from -- mainly from the Middle East for Chinese refiners. Saudi Arabia owns a big fleet. Japan Inc. owns a big fleet. So these ships are not really tramping and are open in the market all the time. Some of them might be because of scheduling issues that are free of cargo and being replaced and stuff like that. But you don't see all of those fleets in the regular spot market. So when you adjust that, I think a reasonable number is to think that the fleet is somewhere maybe 600 ships, maybe a little bit smaller even. So that's why we sort of take the risk at presenting that number. I don't think it's unreasonable to think that the 25% of the compliant tramping fleet are the one that going to be sort of exposed to this consolidation.

Q: I did want to talk a little bit more about the consolidator and kind of tie it into your fleet. At least what we've seen and correct me if I'm wrong, it seems like their focus has been on some more of the older age vessels in the fleet, the 15 -- definitely the 10-plus, but even in some cases, 15-plus year-old vessels. I guess what -- I guess I'm curious, have they -- have they been looking at any more modern or younger tonnage that maybe we just haven't seen? And then tying it into your fleet, yes, obviously, you announced that we got rid of that last 2007 vessel. But at this point, we already -- I mean, time flies when you're having fun. And I guess at this point, we are starting to have 15 -- some more 15-year-old vessels just because time goes by in the fleet. And just kind of curious how you're thinking about some of those vessels that are just in that 15-plus year range now in your fleet?

A: So we are done selling for now. So these -- we have 5 ships that are built in 2011, 2012. They're fantastic ships, large deadweight, excellent fuel economics, very, very good condition, and they serviced both us and our customers very well, and they are earning top dollars in the market. So they're not going anywhere but staying in the DHT fleet.

Q: Has there been any resolution of protocols for demolition of the noncompliant fleet?

A: That's a good question. So we understand now that one of the 2 largest sort of cash buyers in the demolition market is now seeking to get approvals, especially now from the U.S. and OFAC to transact then with counterparties that have been sanctioned in order to acquire these ships and get them demolished. So I don't really have an update as of today what the status is. But I think it makes a lot of sense for everyone to get that resolved and get that activity going because we have some of these ships now that are very old and in the shadow fleet that are losing out on work because conditions or maybe some crew don't want to work on them and things like that. And so they will have to go. And I think this will happen. And I think it's good news that at least one of those cash buyers are pursuing this. I would suspect that maybe the other big one is doing maybe something similar, although I haven't heard the name specifically, but I would guess that they will be looking into the same, so we can get that activity going.