DHT's Q1 2025 Earnings Call: Unpacking Contradictions in Cash Allocation, VLCC Market Dynamics, and Strategic Fleet Management

Cash allocation priorities, VLCC market and oil production, fleet management and strategic positioning, potential impact of contango on the tanker market are the key contradictions discussed in DHT's latest 2025Q1 earnings call.



Financial Performance and Dividends:
- DHT Holdings, Inc. reported revenues on TCE basis of $79.3 million and adjusted EBITDA of $56.4 million for Q1 2025.
- The company declared a quarterly cash dividend of $0.15 per share, marking their 61st consecutive quarterly cash dividend.
- This financial performance was driven by strong revenue growth and disciplined capital allocation.

Vessel Sales and Fleet Optimization:
- DHT sold its ownership in the DHT Scandinavia for $43.4 million, generating a capital gain of $19.8 million.
- The company also entered into two long-term time charter contracts, one for a year at $40,000 per day and another for a year at $52,500 per day.
- These sales and contracts are part of a strategy to optimize the fleet and secure long-term earnings visibility.

Market Dynamics and Demand Outlook:
- The average TCE for the vessels in the spot market was $36,300 per day, with vessels on time charters making $42,700 per day, and the combined average TCE for the quarter at $38,200 per day.
- DHT's optimism is supported by OPEC's decision to increase production, contributing to strengthening freight rates.
- The company anticipates a strong spot market and is constructive on the outlook for the tanker market.