DHT Maritime (DHT) Q4 2021 Earnings Call Transcript

DHT Maritime (DHT 1.25%)
Q4 2021 Earnings Call
Feb 08, 2022, 8:00 a.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Good day, and thank you for standing by. Welcome to the fourth quarter 2021 DHT Holdings earnings conference call. [Operator instructions] With us today, we have co-CEOs, Svein Moxnes Harfjeld; Trygve Munthe; and CFO, Laila Halvorsen. I'd now like to turn the conference over to your first speaker today, Laila Halvorsen.

Please go ahead.

Laila Halvorsen -- Chief Financial Officer

Thank you. Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings fourth quarter 2021 earnings call. I'm joined by DHT's co-CEOs, Svein Moxnes Harfjeld; and Trygve Munthe.

As usual, we will go through financials and some highlights before we open up for your questions. The link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available at our website, dhtankers.com, until February 15.

In addition, our earnings press release will be available on our website and on the SEC EDGAR system as an exhibit to our Form 6-K. As a reminder, on this conference call, we will discuss matters that are forward-looking in nature. These forward-looking statements are based on our current expectations about future events, including DHT's prospects, dividends, share repurchases and debt repayment; the outlook for the tanker market in general; daily charter hire rates and vessel utilization, forecasts of world economic activity, oil prices and oil trading patterns; anticipated levels of newbuilding and scrapping; and projected dry dock schedules. Actual results may differ materially from the expectations reflected in these forward-looking statements.

We urge you to read our periodic reports available on our website and on the SEC EDGAR system including the risk factors in these reports for more information regarding risks that we face. DHT continues to show a healthy and strong balance sheet, and the quarter ended with $60.7 million of cash. At quarter end, the company's availability under both revolving credit facilities was $178.7 million, putting total liquidity at $239 million as of December 31. Financial leverage is about 30% based on market values for the ships.

And net debt per vessel was $17.8 million at quarter end, which is well below current scrap values. Looking at the P&L highlights. EBITDA for the fourth quarter was $32 million, and net loss came in at $2.9 million. We believe this is a very competitive result given the current tanker market.

The result includes the cash distribution of equity of $4.6 million from the Mutual War Risk club and a noncash gain in fair value related to interest rate derivatives of $4.5 million. The company continues to show a very good cost control with opex for the quarter at $19.9 million. Average opex for 2021 was equal to $7,900 per day per ship. G&A for the quarter was $1.9 million, which was low due to a reversal of accruals related to performance compensation.

G&A for the full year was $16.6 million, equal to $1,700 per ship day. We will revert with guidance related to G&A for 2022 in connection with our first quarter result. In the fourth quarter of 2021, the company achieved an average TCE of $21,500 per day, on the average TCE for the full year of 2021 amounted to $22,200 per day. For the first quarter of 2022, 69% of the available days have been booked at an average rate of $19,900 per day.

59% of available spot days have been booked at an average rate of $12,600 per day. Let's go through the cash bridge. We started the quarter with $64.5 million of cash, and we generated $32 million in EBITDA. Ordinary debt repayment and cash interest amounted to $8.8 million, while $6.3 million was allocated to shareholders through share buybacks and the dividend payment.

$14.2 million was used for maintenance and scrubber capex. Changes in working capital amounted to $7.6 million, mainly resulting from redelivery of vessels on time charter, and we ended the quarter with $60.7 million of cash. As you will note, and despite the very challenging freight market, our operations were again cash positive. With that, I will turn the call over to Svein.

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

Thank you, Laila. On this slide, we will discuss a topic which is core to running a ship owning company. How much one operationally gets out of the capital, one has been entrusted. This, as you surely will agree, is best illustrated through the EBITDA margin a company delivers and not just to a quarter or a single year, but over time.

The slide illustrates this very issue over the past five years. We have taken the liberty to compare our margin with the three most relevant peers in the public space. As you will see, the ESG represented by the green bars comes out on top every year over this period. No easy feat, but maybe no coincidence either.

We think this reflects our quality fleet run by a team of some of the best people in this industry within our no nonsense company culture. Another consistent feature in our strategy is how we allocate capital. Firstly, and including this reporting quarter, we will have paid quarterly cash dividends for 48 quarters in a row. Secondly, our capital allocation policy was introduced, and has remained unchanged, seven years ago.

We have given our investors the benefit of excluding negative noncash adjustments and including positive capital gains to our formula of calculating the dividend. And keep in mind, it is a minimum 60% of ordinary net income. For the fourth quarter, we will return a total of $6.3 million to shareholders. As we have previously announced, we bought back 561,000 of our own shares at an average price of $5.28.

The shares were retired upon receipt. In addition to the share buybacks, we will pay a cash dividend of $0.02 per share for the quarter. It will be payable on the 24th of February to shareholders of record on the 17th of February. As mentioned, this marks our 48th consecutive quarterly cash dividend.

For 2021 as a whole, we'll be returning $49 million to shareholders, consisting of $17 million in cash dividends and $32 million in share buybacks. This slide offers an update on our time charter portfolio. We currently have six ships on time charter, four of which will expire during this year. The cover is equal to about 23% for the first half, moving down to about 5% during the second half.

The average rate of these time charters for 2022 is $34,300 per day, excluding profit sharing, if any. We are not actively pursuing additional time charters in the current market. There could be exceptions in relation to possible extensions of current time charters with our customers, subject, of course, to rates and other terms being acceptable. And with that and for the last time, I will turn the call over to Trygve.

Trygve Munthe -- Co-Chief Executive Officer

Thank you, Svein. Let us now update you on where we stand with respect to our strategy of protecting the downside without giving away the upside. Let's look at cash breakeven first. The number we want you to remember from this slide is that our spot ships only need to generate $10,900 per day in 2022 in order for DHT to be cash neutral.

You should recognize this as a sharp and very competitive number. And we can inform you that even in a dreadful current market, our spot ships are making more than this. As Laila said, first quarter spot bookings to date stand at 59% of available days booked at over $12,600 a day. So we dare to state that if you generate cash in this market, you have protected you downside very well.

Let us then switch to the upside. We currently have six ships on time charters, four of which will expire within the year. As you can see, DHT offers great operational leverage and immediate participation once the market recovery finally happens. As an example, if we were to see $50,000 a day average spot rates for the year, we stand to generate $287 million in free cash flow, which equates to $1.70 per share.

You should also note that a $5,000 a day change in spot rates equaled some $38 million in annual cash flow, equivalent to almost a quarter a share. Finally, let us summarize the key messages in this presentation. One, DHT has the strongest balance sheet in the peer group. Two, while we were not profitable in 2021, we are proud of having limited the loss to $11.5 million in the worst tanker market in over a generation.

Although just one of the others have reported so far, we believe this number will compare very favorably to peers. Three, DHT consistently generates superior EBITDA margin compared to peers. Four, with a spot cash breakeven of just $10,900 a day, we are cash flow positive even in today's market. Yet, we have 20 VLCCs in the spot market now giving immediate participation once the market recovers.

And five, we continue to deliver on our capital allocation policy. In 2021, we certainly exceeded the minimum 60% when a total of $49 million was returned in a combination of cash dividends and share buybacks. Before we open up for your questions, let me also add some brief comments about my retirement that was announced a couple of weeks ago. When Svein and I decided to team up just after the great financial crisis of 2008, it was with a desire to build a ship-owning company that was doing all the right things, namely; investing countercyclically, building a balance sheet suitable for the business and staying disciplined through the cycles.

DHT became our platform, and I'm very proud of how we have been able to transform what was a small tonnage provider to the sizable and highly regarded VLCC owner we are today. We have done it together with a small group of talented and dedicated shipping professionals without whom it just couldn't have happened. The company is in excellent shape with a great fleet, strong balance sheet and a terrific team, both at shore and aboard the ships. So why in the world would I want to step down from this? A good question indeed.

But the simple reason is that I've always wanted to retire in time to be able to enjoy and pursue my many hobbies while still young and strong. It really is as simple as that. I feel that all of us at DHT have accomplished what Svein and I set out to do some 13 years ago, and it doesn't stop here. I'm convinced the future holds great things for DHT.

I'm very proud of what DHT has become. And I'm totally confident Svein and the team will continue to do the right things and skillfully navigate the DHT ship through the coming tanker market cycles. It has been a great journey, and I'd like to thank all my wonderful colleagues for the ride. So with that, we are now ready to take your questions.

Operator?

Questions & Answers:

Operator

Thank you. [Operator instructions] Our first question comes from the line of Randy Giveans from Jefferies. Please ask your question.

Randy Giveans -- Jefferies -- Analyst

Howdy team DHT. How is it going?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

Very well. Thanks. How are you?

Randy Giveans -- Jefferies -- Analyst

I'm well, doing all right. Well, I guess, first question, just looking at capital return. You did about $6.3 million for the fourth quarter, roughly 50-50 split between stock purchases and the dividend. Is that kind of a goal now in terms of 50-50 split? I know you have a minimum dividend of $0.02 in terms of the share buybacks, how is that number determined or was that just the maximum amount of shares you could buy during that period?

Trygve Munthe -- Co-Chief Executive Officer

I think, first of all, Randy, that the $0.02 has been a minimum for a number of years, but it's not really part of the capital allocation policy. So I just wanted to, for sake of good order, that this is not something we have committed to in writing, but the practice has been that way for sure. And to your second question on buybacks, we have been on and off on this over the years. And as you all know, the preference has been for cash dividends and only on certain occasions when we see particularly depressed share prices and whatnot, we have done some buybacks.

And of course, last year, we did more than we've done in quite a while. But it's always going to be an opportunistic approach to it that we look at the cash flow of the company and we look at other potential uses of capital. And of course, as you know, last year, we did invest into modern scrubber-fitted eco-ships. The market ran a bit away from us price-wise after that.

And we then allocated some capital to buying back, own some shares instead. So it is very hard to give any firm guidance on what we're going to do in the future, but it's certainly one of the alternatives to allocate capital to.

Randy Giveans -- Jefferies -- Analyst

OK. No, that's fair. It's great to see the share count going down and your NAV going up. So good use there.

I guess second question for me in terms of the general market, right? Brokers continue to say rates are negative, but you just mentioned your spot rates are still above $10,000 plus per day. That said, still a relatively low level. So with demand on the rise, inventory levels at eight-year lows. OPEC gradually increasing supply, what is keeping such a maybe tight lid on rates? And when do you expect to see an inflection higher?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

I think all the things you mentioned, Randy, is right in oil market and that's -- we recognize these things moving ahead. And eventually, it will be in a strong favor of the tanker market. The short answer in the short term is that there's just way too many ships in the market. So one, you have a big sort of ghost fleet satisfying a demand for transportation from sanctioned barrels.

And secondly, you have had hardly any scrapping or retirements of ships. So we're now close to, I think, 27%, 28% of the fleet older than 15 years, and we are between 11% and 12% of the fleet older than 20 years. There will be some 35 ships this year turning 20. And far from all these ships have been through dry docks or install ballast water treatment systems, etc.

And scrap prices are high. So I think all logic sort of leads you to scrapping will have to start at some point. And that's really the short-term pain here, is that there is too many ships in the market.

Randy Giveans -- Jefferies -- Analyst

Yeah. No, that's fair, simple supply/demand. All good. Well, thanks again.

Congrats on retirement Trygve. Enjoy the next stage of life and stay young and strong.

Trygve Munthe -- Co-Chief Executive Officer

Thanks, Randy. I appreciate it.

Randy Giveans -- Jefferies -- Analyst

All right. See you.

Operator

Thank you. Our next question comes from Chris Tsung from Webber Research. Please ask your question.

Chris Tsung -- Webber Research -- Analyst

Hi. Good afternoon, everyone. How are you?

Trygve Munthe -- Co-Chief Executive Officer

Good. Thanks.

Chris Tsung -- Webber Research -- Analyst

Just wanted to ask about the dry docking. I think there was three scheduled in 2022. On the last call, I believe you guys said there was one in the first half and two in Q3. Just is there any update? Is this potentially going to be slided forward given where the market is now or do you expecting this to stay in line?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

We've got one in dry dock as we speak and the chances are will try to bring also the other two as forward as we possibly can, but there's no set date yet. But the schedule we communicated is what is required according to class.

Chris Tsung -- Webber Research -- Analyst

OK, thanks. And for the Q1 fixtures to date. Can you confirm what is the spot rates booked so far?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

Yes. As Laila said, it's $12,600 for the first quarter.

Chris Tsung -- Webber Research -- Analyst

OK. That's it for me. Thank you and congrats on retirement Trygve.

Trygve Munthe -- Co-Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from Omar Nokta from Clarksons Securities. Please ask your question.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Yeah. Thank you. Hi, guys. Good morning.

Good afternoon. And also Trygve, from us, at Clarksons, wishing you also a happy retirement. And I think agreeing with your comments, you're leaving DHT in great shape, which is, I think, really saying something considering the kind of market we've been in the past 18 months or so. Wanted to ask maybe a bit more kind of about the debt schedule.

Clearly, you guys have not much to pay this year, and it's very doable with your existing cash resources. But in '23 and '24, you do have a couple of maturities. What are you thinking in terms of refinancing those timing-wise?

Trygve Munthe -- Co-Chief Executive Officer

I think, historically, we have addressed refinancings in time so that the sort of expiring facility doesn't show up as short-term debt. So typically, we'd like to do it a year out, something like that. And quite frankly, with the loan to value that we have, we do not see any potential issues at all. To the contrary, I think there's a good chance that the company is going to be able to refinance at more attractive terms, generally speaking.

Omar Nokta -- Clarksons Platou Securities -- Analyst

OK. And then I guess maybe just sort of -- I think Randy had brought up just the OPEC and some of the barrels. So just maybe shifting on to that. Last week, one of the big real discussion points coming out of the OPEC+ meeting was the real inability of some of the producers, especially out of West Africa to meet their quotas and basically struggling to hit their targets.

And the Middle East seems to have been a bit more or less on target. In terms of trading patterns, what are you seeing for VLCCs as a result of this? And then is there any indication that things are improving out of West Africa and returning to some sort of normalized amount of cargoes? Any color you can give on that?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

I think you're right to point West Africa has been disappointing with Nigeria and Angola, in particular. And the OPEC system works as such that if one country is not delivering on its quota, the other countries are not sort of permitted to step up. Maybe this will change. So obviously, one country being the elephant in the room in OPEC.

So maybe they will decide that somebody will have to step up in time, which certainly will be good for the tanker market. But I can't say that we've seen any leads in West Africa sort of stepping up. I guess, what we've seen is that the rig counts in the shale business is increasing. So that could well be an indication that production there is going up.

And with prices where they are, these producers will certainly make good cash flows. And the market is tight, so there should be space for those power to come out. So that will certainly be positive for the freight market.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Thanks, Svein. And then maybe just one final question for you. Just from your lends in the sale and purchase market, there's been a lot of talk earlier in the year. I guess, we're still early.

But I think at the start of the year, there's been -- there have been a lot of discussion about cash buyers coming into the tanker space, looking at both crude and product ships in the secondhand market. Is that something you're still seeing? Anything you can give or any insight you can give on how the S&P market is looking today from your vantage point?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

I think in the older and it's a bit more quiet. There was quite a lot of activity, I would say, first half last year, which we took advantage of selling the three older ships in our fleet. We keep in mind also some of these so-called cash buyers are buyers that at least we would not transact with that they will not be regarded as KYC-able, if you like, for lack of a better word. And so then you just have to refrain from doing business.

But it seems that it's a bit more quiet in that market. And this illicit trade is not a growing trade. So we would be surprised to see sort of more people diving into this to expand their fleets to service that market. If anything, sanctions are being discussed and in maybe not-too-distant future, this will change.

So in the modern end, there's also been very few transactions. I can't see anything happened in the past six months and almost -- I think there's a bit of a standoff. There are some potential sellers asking prices, which are quite a bit above where maybe buyers are. So again, it's very quiet.

Where you have seen activity as of late are somewhere in the 10, 12-year old spectrum where the assets have changed hands at more or less sort of broker values.

Omar Nokta -- Clarksons Platou Securities -- Analyst

Got it. Thank you, Svein. I appreciate the comments and Trygve, happy retirement.

Trygve Munthe -- Co-Chief Executive Officer

Thank you very much.

Operator

Thank you. Our next question comes from Magnus Fyrh from H.C. Wainwright. Please ask your question.

Magnus Fyrh

Yes, hi. Congratulations to a good quarter despite the challenging market. Also, I wanted to congratulate Trygve on happy retirement. Hope you find time to do all your hobbies.

First, I just want to follow up on Omar's question on the market recovery. We all talked about OPEC struggling to reach their production quotas. But do you see the recovery or the seasonal -- the summer market playing out different this year? I guess you already mentioned that there could potentially be reallocation of quotas within OPEC. But just curious, since you guys have a pretty good crystal ball to see, what you guys think about if there's any other drivers here that could offset some of the weakness?

Trygve Munthe -- Co-Chief Executive Officer

I think sort of the normal seasonality, at least this winter market hasn't seen any of the normal seasonality. And you can certainly argue a strong case that you will see a stronger summer than what you saw in the winter. And we feel, as we've discussed already, it hinges so much upon how much additional production is going to come to market over the next few months. And also, when is the dam going to break in terms of retiring older ships.

We feel that there is a huge sort of pent-up potential there. So you could very well see or again, argue a case where you would see a very strong summer market and thereby, having a flip-sided seasonality in the year of 2022.

Magnus Fyrh

All right. Good. Thanks for that color. And just one housekeeping item.

G&A dropped significantly in the fourth quarter. I guess there was some mention of social security. I guess, there's some accruals there. Was there anything in particular for the fourth quarter? And what's a good run rate going forward?

Trygve Munthe -- Co-Chief Executive Officer

It wasn't social security, but it was -- we accrue bonuses through the year. And in the loss-making year, bonuses were certainly cut back dramatically. And there is the main reason for the lower G&A for the quarter, the reversal of accruals. And as was mentioned earlier on the call, guidance for future G&A, we would like to come back or Svein and Laila would like to get back on the next earnings call in May for the first quarter of this year.

Magnus Fyrh

OK. Very good. Well, thank you and happy retirement.

Trygve Munthe -- Co-Chief Executive Officer

Thanks again, Magnus.

Operator

Thank you. Our next question comes from Jon Chappell from Evercore. Please ask your question.

Jon Chappell -- Evercore ISI -- Analyst

Thank you. Good afternoon. Only one left for me, kind of big picture. Svein, as you think about the next couple of years, where we are in the cycle, all the things we've addressed and why the market hasn't improved yet.

And also kind of flying solo now with Trygve's retirement, have you and the board discussed any changes in strategy whatsoever as it relates to either the growth of the fleet, the employment of the fleet, different segments or financial or is it kind of just steady as she goes until recovery and we'll revisit at that point?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

It's the latter. That's the short answer.

Jon Chappell -- Evercore ISI -- Analyst

OK. Short answer, short question. Thanks. All the best.

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

OK. Thanks, Jon.

Operator

Thank you. [Operator instructions] Our next question comes from Robert Silvera from [Inaudible]. Please go ahead.

Magnus Fyrh -- H.C. Wainwright and Company -- Analyst

Hello.

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

Yeah, sorry. Please go ahead.

Magnus Fyrh -- H.C. Wainwright and Company -- Analyst

Yeah. My name is Robert Silvera, OK. I want to, first of all, thank you, that you have done such a wonderful job of setting the business up to be able to endure for a longer period and for a future longer period at current rates, which, in effect, will give you a tremendous advantage once rates turn around and that you can save and make as much money as you referred to earlier in your presentation that if it went up to $50,000 a day, the cash would flow in so fast as it did in 2020. Now for that, given that will you then go back to rapid reduction of debt, which has paid you so well in the past?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

As Trygve said, when cash flows permit, we also like to invest in our balance sheet. And as you rightly noted, our balance sheet today is very strong. In fact, it's the strongest among all the peers. So it's sort of -- there is no urgency to do this, but we think it will offer the company much more flexibility through the cycles by having potentially even a stronger balance sheet.

So that will definitely be on -- or in the cards that when cash flows permit in addition to rewarding shareholders, we will continue to invest in the balance sheet.

Magnus Fyrh -- H.C. Wainwright and Company -- Analyst

Well, I want to thank you very much for that approach. I'd like to mention to you something that I've observed in the market, a company called ZIM Integrated Shipping, which has virtually no debt. And I have seen within the last 52 weeks of trading, the stock has gone from a low of $15 to where it's currently trading at around $72 a share. And it really strongly exemplifies what can be done when a company has -- a shipping company has virtually no debt.

And so I definitely encourage you to study that. As a possibility of adopting that full no debt approach, which would then -- especially if we have rates that stay up for a while, we can then accumulate not only cash for new ships when the time comes around that we need them without going into additional heavy debt again. So -- and the final thing for me as a shareholder of many years now, we would love to see you, and I've spoken of this before, take a look at instead of straight out buying the shares, for instance, selling put options at various months, different periods so that, at $5 a share let's say, where right now there are enough outstanding put options to cover the kind of volume that you have actually purchased, straight out. So that would definitely give us cash flow that would give a floor as to where you're buying it, namely at $5 a share.

And currently, if you go out far enough, you can get $0.45 or so a share for those put options, which means, in effect, if it went below $5, you would be buying the stock for $4.55 a share, which is, of course, a screaming bargain. I really encourage you to examine the possibility of that and look at how many outstanding put options there are in these neighborhoods and in the months to come. Please consider it.

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

Well, thank you for your input, we take note of that.

Operator

Thank you. Our next question comes from Clement Mulounge Bayou Investors AG. Please ask your question.

Magnus Fyrh -- H.C. Wainwright and Company -- Analyst

Good morning. Thank you for taking my questions. In the press release, you mentioned you remain cautiously optimistic on the overall market. And I was wondering if you could provide some additional insight on the potential impact, the waiving of Iran sanctions would have on the overall tanker market? Approximately, how much incremental demand would you expect?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

It's hard to have an exact figure here, but we guestimate that there are some 50 to 60 large tankers involved in trading sanction oil. And this is not only Iran but also Venezuelan crude. I think the trick to the game here is that these barrels are currently being sold at a discount in order to entice the market to buy them. And then they have to pay a premium freight to get older ships willing to do this sanction trade.

Once those barrels become legit, those ships are sort of burned, they will be off. And the seller of that oil can access the normal freight market. So it will be more oil for the ship that is sort of regular and this illicit ghost fleet will just be moved out of the market. So that in the net-net, should be positive.

It's hard to say exactly what the number is. How much additional oil it will be. But I think there are some indications that it could be a 1 million barrel per day, but we don't have an exact figure.

Trygve Munthe -- Co-Chief Executive Officer

If I may add, I personally, I think it would be a huge difference because it will be more barrels for transportation, and there will be 50 or 60 ships retired within a relatively short time. So the combination of more demand and a meaningful decrease in supply is going to be a totally different freight market, I personally think.

Magnus Fyrh -- H.C. Wainwright and Company -- Analyst

Thank you. We also believe it will be a significant positive. And I was wondering if you could provide some commentary on the Iranian fleet, some people say it will offset part of these benefits and some say it will take a long time to be online once again. So could you provide some commentary on that?

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

The Iranian VLCC fleet, if I'm not wrong count 38 vessels and the average age of that fleet is, I think, 17 and a half years. So it's not a young and efficient fleet. And many of these ships are used to store oil floating off Iran as a buffer. So it will be tough to sort of make that entire fleet fully efficient and marketable to this chart at all sort of terminals around the world.

So I don't think that will sort of offset all of that. Maybe some of these ships will trade, but some of them are already trading with barrels. So it's not like you have a flood of new ships that are locked there today. So maybe a limited impact.

Magnus Fyrh -- H.C. Wainwright and Company -- Analyst

All right. That's helpful. Thank you very much.

Operator

Thank you. [Operator instructions] There are no further questions. I'll now turn the call back to the management team for the closing remarks.

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

Well, thank you very much to all for listening in on DHT. And also thank you for offering my good friend and business partner, Trygve, a good farewell on his retirement. Have a good day.

Operator

[Operator signoff]

Duration: 40 minutes

Call participants:

Laila Halvorsen -- Chief Financial Officer

Svein Moxnes Harfjeld -- Co-Chief Executive Officer

Trygve Munthe -- Co-Chief Executive Officer

Randy Giveans -- Jefferies -- Analyst

Chris Tsung -- Webber Research -- Analyst

Omar Nokta -- Clarksons Platou Securities -- Analyst

Magnus Fyrh -- H.C. Wainwright and Company -- Analyst

Jon Chappell -- Evercore ISI -- Analyst

Unknown speaker -- H.C. Wainwright and Company -- Analyst

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