DHT Holdings' Q3 2025: Contradictions Emerge on Sanctions, Older Ships, and Port Fee Dynamics

Date of Call: None provided

Financials Results

• Revenue: $79.1M TCE-based revenue; adjusted EBITDA $57.7M; average combined TCE $40,500/day (spot $38,700/day; time charter $42,800/day)
• EPS: $0.28 per share (net income $44.8M); $0.18 per share adjusted net profit after $15.7M gain on vessel sale and $0.4M non-cash interest-rate derivative loss

Guidance:

• Q4 bookings: 901 time-charter days covered at $42,200/day.
• For Q4 profit-sharing contracts: 1,070 spot days, 68% booked at $64,900/day.
• Q4 spot P&L breakeven estimated at $15,200/day.
• 2026 estimated discretionary cash flow margin ~ $7,500/day (P&L vs cash breakeven difference).
• Capital allocation: maintain dividend policy; Q3 dividend $0.18/share (63rd consecutive quarterly cash dividend).

Business Commentary:

• Strong Financial Performance in Q3 2025:
• DHT Holdings Inc. achieved revenue on a TCE basis of $79.1 million and adjusted EBITDA of $57.7 million in Q3 2025.
• The company reported a net income of $44.8 million, equal to $0.28 per share.

• The financial results were supported by strong demand and a fragmented fleet, leading to increased rates.

• Dividend Policy and Shareholder Returns:

• DHT Holdings approved a dividend of $0.18 per share for Q3, marking the 63rd consecutive quarterly cash dividend.
• Since updating its capital allocation policy in Q3 2022, the total accumulated dividend is $2.93 per share.

• The company's strong financial performance and consistent dividend policy have contributed to shareholder returns.

• Vessel Operating and General & Administrative Expenses:

• Vessel operating expenses for Q3 were $18.4 million, while G&A expenses were $4.1 million.

• The low operating costs are attributed to the company's focus on maintaining a competitive cost structure and robust breakeven levels.

• Liquidity and Financial Leverage:

• DHT Holdings ended Q3 with total liquidity of $298 million, consisting of $81.2 million in cash and $216.5 million available under two revolving credit facilities.
• The company maintained a low financial leverage of 12.4% based on market values for the ships, with net debt just below $9 million per vessel.

Sentiment Analysis:

Overall Tone: Positive

• Management: "the VLCC market is demonstrating significant strength" and that this "should positively impact our earnings"; company highlights a "robust balance sheet" with $298M liquidity and maintains a $0.18/share dividend (63rd consecutive), indicating confidence in cash generation.

Q&A:

• Question from Frode Morkedal (Clarksons Platou Securities AS): With China postponing the portfolio/port-fee changes for a year, is that good for the market and for your positions? Also, does China still have tariffs on U.S. crude? And with spot rates very high, do you see time-charter levels or durations improving and would you add time-charter coverage?
  Response: Management: The pause likely creates a short timeout but overall market strength is driven by firm demand and a fragmented/shrinking fleet; U.S. crude exports to China have been modest; interest in shorter-term, higher-rate charters is rising and DHT is open to repricing or adding time-charter coverage if meaningful, but it’s early.

• Question from Geoffrey Scott (Scott Asset Management): As charter rates rise, will respectable charterers accept ships over 15 years (possibly up to 20+ years) or reduce reluctance to take older tonnage?
  Response: Management: In stronger markets customers become more pragmatic and commonly accept ships up to ~17–18 years; DHT views commercial life up to age 20 for its fleet, while opportunities beyond 20 are limited.

Contradiction Point 1

Impact of Sanctions on Indian Crude Oil Imports from Russia

It involves the impact of sanctions on Indian crude oil imports from Russia, which affects the demand for shipping services and potentially influences market dynamics.

What is the current status of the U.S. crude oil tariff in China? - Frode Morkedal (Clarksons Platou Securities AS)

2025Q3: DHT's VLCCs are playing a significant role in this shift, where we have seen 2 of our largest VLCCs being time chartered for 12 to 15 months covering nearly 20% of these exports. - Svein Moxnes Harfjeld(CEO)

What is the potential impact of tariffs on India's crude oil imports from Russia? - Frode Morkedal (Clarksons Platou Securities AS)

2025Q2: Initially, India imported 2 million barrels per day of Russian oil, which has decreased by 20% in July and is expected to remain low in August. This shift is favorable for larger ships. - Svein Moxnes Harfjeld(CEO)

Contradiction Point 2

Charter Appetite for Older Ships

It pertains to the charter appetite for older ships, which can impact DHT's revenue and fleet strategy.

Do you see major charterers becoming less hesitant to take ships over 15 years old as charter prices rise? - Geoffrey Scott (Scott Asset Management)

2025Q3: Customers are more accepting of ships up to 17-18 years old in a strong market. DHT's commercial life expectation is up to age 20. - Svein Moxnes Harfjeld(CEO)

What is DHT's approach to fleet renewal following the sale of the VLCC Lotus and Peony? - Sherif Ehab Elmaghrabi (BTIG, LLC)

2025Q2: In the second quarter, customers were again expecting to buy mainly used tonnage in the 2008 to 2015 vintage. There is no indication that customers are moving out of this range. - Svein Moxnes Harfjeld(CEO)

Contradiction Point 3

Market Demand and Port Fees

It involves differing perspectives on the impact of port fees and market demand, which are crucial factors affecting the company's earnings and market strategies.

What are the implications of the one-year delay in Chinese port fees for the market and DHT's position if normal operations resume? - Frode Morkedal(Clarksons Platou Securities AS)

2025Q3: The impact of the port fees had initially caused a market timeout, but it also led to some replacement jobs and rate increases. With the postponement, there will likely be another timeout before ships restart fixing. The strong demand and fragmented fleet are expected to continue driving market strength. - Svein Moxnes Harfjeld(CEO)

Can OPEC barrels offset potential Atlantic Basin decline this summer? - Omar Nokta(Jefferies)

2025Q1: We have seen a strong increase in demand since February 2022, especially from China where we believe there is a structural change in the market driven by a fragmented fleet and increased demand due to an ailing flee age profile among others. - Svein Moxnes Harfjeld(CEO)

Contradiction Point 4

Customer Acceptance of Older Ships

It involves changes in customer preferences regarding the age of ships, which can impact the company's asset management and fleet strategy.

Is there less reluctance among major charters to take ships over 15 years old as charter prices increase? - Geoffrey Scott(Scott Asset Management)

2025Q3: Customers are more accepting of ships up to 17-18 years old in a strong market. DHT's commercial life expectation is up to age 20. Sanctions trades have created opportunities for older ships, but beyond 20 years, commercial opportunities are limited. - Svein Moxnes Harfjeld(CEO)

Why the decision to sell only to Chinese large ships? How do you compare Korean vs. Chinese-built ships? Is there a specific priority for cash usage? - Frode Mørkedal(Clarkson Securities)

2025Q1: The ship is 15 years old. It is a very good quality mat ship and we have known customers in China that have been interested in taking it, but there's a reluctance and it is common in the market for customers to be reluctant to take ships over 15 years old. - Svein Moxnes Harfjeld(CEO)

Contradiction Point 5

Market Impact of Chinese Port Fees

It highlights differing perspectives on the impact of Chinese port fees on the market, which could affect demand and supply dynamics.

Is the one-year postponement of Chinese port fees a positive market development? What are the potential impacts on the market and DHT if operations normalize? - Frode Morkedal(Clarksons Platou Securities AS)

2025Q3: The impact of the port fees had initially caused a market timeout, but it also led to some replacement jobs and rate increases. With the postponement, there will likely be another timeout before ships restart fixing. - Svein Moxnes Harfjeld(CEO)

What's the update on China's new port fees for U.S. crude, and how are they impacting your operations? - Frode Morkedal(Clarksons Platou Securities AS)

2024Q4: The beginning of the year was characterized by strong market conditions, but they moderated significantly in March, which was largely driven by the increase in Chinese export port fees. - Svein Moxnes Harfjeld(CEO)