Logo of jester cap with thought bubble.

Image source: The Motley Fool.

DATE

Wednesday, May 6, 2026 at 8 a.m. ET

CALL PARTICIPANTS

  • Chief Executive Officer — Svein Moxnes Harfjeld
  • Chief Financial Officer — Laila Halvorsen

Need a quote from a Motley Fool analyst? Email [email protected]

TAKEAWAYS

  • Total Revenues (TCE basis) -- $157 million, with adjusted EBITDA at $133 million and ordinary net income at $103.4 million or $0.64 per share after adjustments for vessel sale gains and non-cash derivative items.
  • Spot and Time Charter Performance -- Vessels in the spot market earned $91,700 per day, while time chartered vessels achieved $61,300 per day; average combined TCE for the fleet was $78,800 per day.
  • Vessel Operating Expense -- $19.1 million, including $2 million in non-recurring spares and consumables costs.
  • Total Liquidity -- $350 million at quarter end, composed of $126 million in cash and $230 million undrawn under revolving credit facilities.
  • Leverage -- Financial leverage was 16.8% on fleet market values with net debt reported at $16.5 million per vessel, which management stated is below estimated residual values.
  • Divestments and Newbuilds -- Three older vessels sold; the final ship, DHT Bauhinia, sold for $51.5 million with an expected $34.2 million capital gain and delivery targeted by June-July. Three of four Antelope-class newbuildings delivered, with the final vessel due in summer.
  • Term Charters Secured -- Five older ships now on 1-year time charters averaging $101,000 per day; additional one newbuilding placed on a 5- to 7-year term charter. DHT Harrier's time charter extended for five years at $47,500 per day with two additional optional years at higher rates.
  • Dividend -- $0.64 per share approved, equal to 100% of ordinary net income; marks the company's 65th consecutive quarterly dividend.
  • Breakeven Estimates -- P&L breakeven for the next three quarters expected at $29,700 per day; cash breakeven at $23,400 per day; difference of $6,300 per day to be retained for corporate use.
  • Q2 Booking Update -- 997 time charter days fixed at $73,900 per day and 1,025 spot days (88% booked) at $168,300 per day; spot P&L breakeven projected at less than zero due to time charter coverage exceeding forecasted costs.
  • Dry Docking Program -- Seven vessels scheduled for dry dock this year; program is fully integrated into operational and capital plans without anticipated impact on availability or cash flow.
  • Balance Sheet Activity -- Cash flow highlights: $133 million EBITDA, $20 million in debt repayment and interest, $201 million from vessel sales, $66 million paid out as dividend, and $160 million invested in vessels under construction.
  • Market Structure -- Management highlighted recent strategic fleet consolidation, with the structure impacted by activity from a private aggregator as a "historical first," expected to influence the VLCC market positively.
  • Risk Premiums and Route Adjustments -- Regional volatility involving Iran increased risk premiums on certain trade routes, resulting in substantial earnings dispersion by route; approximately 10% of the global VLCC fleet reported idle due to Gulf access limitations.
  • Sanctions and Working Fleet -- Management projects that potential Iranian and Venezuelan sanctions relief, along with fleet modernization, could shrink the working VLCC fleet by 10%-15% as legacy shadow fleet tonnage retires.

SUMMARY

Management attributed a step-up in free cash generation to the delivery of new Antelope-class vessels and sale of older ships, ensuring modern asset exposure coincident with high freight rates. The company's 2026 dry dock schedule, fully incorporated into financial guidance, allowed ongoing fleet deployment without limiting commercial flexibility. Strategic decisions to expand both spot and time charter coverage created what management characterized as a balanced risk profile amid market volatility. Extended tenor on select employment contracts was paired with significant spot rate upside secured through new fixtures and profit-sharing time charters. Lastly, management forecast further sector tightening from the combination of upcoming regulatory shifts and accelerated retirement of non-compliant tonnage.

  • Management stressed that "we have no ships inside the Gulf" during regional conflict escalation, and all assets remain fully operational and unaffected.
  • Profit-sharing charter mechanisms utilize vessel-specific index formulas but details remain undisclosed, with management confirming customer payments to date have not been disrupted.
  • Company policy is to avoid trade routes regarded as unsafe for crew, and risk premiums on Fujairah and Yanbu routes have normalized toward Atlantic rate levels as market participants gain confidence in safety.
  • Based on current contracts, the company stated it is "quite content for now" with its term business coverage, with around 50% of the fleet secured on time charter, including two ships with uncapped profit-sharing components.
  • Management noted that the Yanbu terminal in the Red Sea is capable of handling 4 million barrels per day and has functioned for years, with no efficiency impact relative to Gulf-origin trades for comparable voyage durations.
  • For future fleet renewal, DHT Holdings, Inc. (DHT 0.84%) indicated that competition for on-the-water tonnage remains limited by a strong earnings environment, as vessel owners prefer to retain ships rather than sell; no specific acquisition plans were disclosed.
  • Potential impacts from UAE's OPEC exit were discussed, with management suggesting any increase in Fujairah-origin exports could boost industry-wide seaborne volumes and favor tanker demand.

INDUSTRY GLOSSARY

  • VLCC: Very Large Crude Carrier, an oil tanker with a capacity typically ranging from 200,000 to 320,000 deadweight tons, used extensively for long-haul crude shipments.
  • TCE (Time Charter Equivalent): A performance metric expressing revenue per day per vessel, combining both time charter and spot market rates for comparability.
  • RCF (Revolving Credit Facility): A flexible line of credit that allows companies to borrow and repay funds repeatedly up to a fixed limit.
  • Shadow Fleet: Tankers that operate outside for compliance with international sanctions, typically moving sanctioned crude oil.
  • TD3C Index: A widely referenced Baltic Exchange route index, tracking spot freight rates for VLCCs traveling from Saudi Arabia to China.
  • COA (Contract of Affreightment): A long-term contract covering the transport of multiple cargoes, often at fixed or formula rates.
  • Special Survey: Intensive inspection required by classification societies on a ship's hull, machinery, and other systems every five years.

Full Conference Call Transcript

In the first quarter of 2026, we achieved revenues on TCE basis of $157 million and adjusted EBITDA of $133 million. Net income came in at $164.5 million, equal to $1.02 per share. After adjusting for the $60 million gain on sale of DHT Europe and DHT China and a non-cash fair value gain related to interest rate derivatives of $1.1 million, we had ordinary net income for the quarter of $103.4 million equal to $0.64 per share. Vessel operating expenses for the quarter were $19.1 million, which included approximately $2 million in non-recurring costs related to spares and consumables. And G&A for the quarter was $5 million.

In terms of market performance, our vessels trading in the spot market earned an average of $91,700 per day, while vessels on time charters achieved $61,300 per day. The average combined TCE for the fleet in the quarter was $78,800 per day. We continue to maintain a very strong balance sheet, supported by conservative leverage and robust liquidity. At the end of the first quarter, total liquidity was $350 million, consisting of $126 million in cash and $230 million available under our two revolving credit facilities. Following the repayment of $56 million in April under the Nordea revolving credit facility, current availability under our 2 RCFs stands at $285.8 million.

At quarter end, financial leverage was 16.8% based on market values for the fleet and net debt was $16.5 million per vessel, which is well below estimated residual values. Looking at our cash flow, we began the quarter with $79 million in cash. From operations, we generated $133 million in EBITDA. Debt repayment and cash interest totaled $20 million. Proceeds from sale of DHT Europe and DHT China amounted to $201 million and $66 million was distributed to shareholders through a cash dividend. $2.8 million related to investments in vessels and $160 million was deployed towards investments in vessels under construction, which included delivery of our first three new buildings. We also issued $91.5 million in long-term debt.

Changes in working capital and other items amounted to $30 million, and the quarter ended with $126 million in cash. With that, I will turn the call over to Svein to go through the quarterly highlights.

Svein Moxnes Harfjeld: Thank you, Laina. We are very pleased with the well-time delivery of the first three of our four new buildings in the Antelope class. The DHT Antelope delivered in January, the DHT Addax and DHT Gazelle in March. The fourth vessel, DHT Empower is expected to deliver this summer. This represents fleet renewal in conjunction with planned divestment of our three older ships built in 2007, two of which have been delivered. The last of the three, DHT Bauhinia, was sold for $51.5 million in the quarter and is expected to deliver in June, July. We expect a capital gain of $34.2 million and cash proceeds of $50.5 million from this last sale.

Our planned increase of market exposure for the first half of this year had the objective not only to benefit from the spot market, but also to balance this with selective new term employment. It has been a busy period with numerous contracts secured. First, the DHT Harrier built 2016 with their existing time charter due to expire, extended the contract for 5 years from January 26 at $47,500. It has two optional years priced at $49,000 and $50,000. We then secured three new 1-year time charters. DHT Opal built 2012 for 1 year at $90,000; DHT Taiga built 2012 for 1 year at $94,000; DHT Redwood built 2011 for 1 year at $105,000.

Further, one of our newbuildings delivered into a 5 to 7-year time charter with a key customer. Subsequent to the quarter end, we secured two additional 1-year time charters for DHT Sundarbans built 2012 and DHT Amazon Built 2011 with average rate of $109,000 per day. As such, our Five older ships are then out on 1-year time charter contracts averaging $101,000 per day. Back to you, Laila.

Laila Halvorsen: Thank you. In line with our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividends, the Board has approved a dividend of $0.64 per share for the first quarter of 2026. This marks our 65th consecutive quarterly cash dividend. The shares will trade ex-dividend on May 21, and the dividend will be paid on May 28 to shareholders of record as of May 21. Here, we also present our estimated P&L and cash breakeven levels for the last 3 quarters of 2026. Our PLM breakeven for the period is estimated at $29,700 per day, while our cash breakeven is estimated at $23,400 per day, which reflects all through cash costs.

The difference between our P&L and cash breakeven is estimated at $6,300 per day for the last 3 quarters. This discretionary cash flow will remain within the company and be allocated for general corporate purposes. On this slide, we present an update on bookings to date for the second quarter of 2026. We expect 997 time charter days covered for the second quarter at an average rate of $73,900 per day. This rate includes profit sharing for the month of April and the base rate only for the months of May and June for contracts with profit sharing structures.

We also anticipate 1,025 spot days for the quarter, of which 88% have already been booked at an average rate of $168,300 per day. The spot P&L breakeven for the quarter is estimated to be less than zero as the time charter earnings are expected to exceed forecasted costs. Turning to our 2026 dry dock schedule. As shown on this slide, we have seven vessels scheduled for dry docking during 2026. DHT Lion completed its second special survey in dry dock in the first quarter, and this was completed on time and within expectations.

Looking at the remainder of the program, four vessels, DHT Osprey, DHT Panther, DHT Puma and DHT Harrier are scheduled for their second special survey in dry dock. In addition, DHT Amazon and DHT Redwood are scheduled for their third special survey in dry dock. Overall, the 2026 dry dock schedule is well planned, fully incorporated into our operating and capital expenditure outlook and does not change our underlying view on fleet availability or cash flow generation. Importantly, this reflects our continued focus on maintaining a high-quality fleet while preserving operational reliability and asset value over the long term. And then I'll turn the call back to Svein.

Svein Moxnes Harfjeld: Thank you, Laila. We will now spend some time on what we see as the current market pillars, the future catalysts and our strategic positioning. We will here start with the current market pillars. The VLCC market is, in our view, influenced by the following primary drivers. First, the basic supply-demand fundamentals continue to support freight rates as evidenced during the second half of 2025 when the freight market strengthened without any special events taking place. Second, we experienced strategic fleet consolidation with the market structure having been strengthened by significant consolidation activity from a private aggregator during the first quarter of 2026. This is a historical first and the fleet demographics and fragmented ownership made this truly possible.

We don't see this effort as a fly by night and expect it to positively influence our market going forward. Third, risk premiums driven by regional volatilities involving Iran have introduced significant risk premiums on certain trade routes, resulting in substantial earnings differences between the various trading routes. This is not a fundamental driver, but has alert to the entire industry to how vulnerable it is to curve balls. Fourth, near-term loss in crude oil available for transportation from the Middle East Gulf is a risk.

We believe, however, that this could be compensated by reduced vessel productivity through: one, increased transportation distances as refiners source barrels from further away; and two, approximately 10% of the VLCC fleet being tied up either with cargo waiting to exit the Gulf or waiting to load from Saudi Arabia's Western export facility. For the sake of good order, we have no ships inside the Gulf when the conflict broke out. We have no ships inside currently, and our fleet is fully operational. Now let's discuss the future catalysts. We believe several emerging trends warrant specific attention as they are expected to provide longer-term tailwinds for the large tanker market and our operations. Sanction relief and trade normalization.

Assuming conflicts will be resolved, potential sanctions relief on Venezuelan and Iranian crude exports would likely shift volumes from the shadow fleet to compliant operators, thereby expanding the addressable market for our vessels. Fleet modernization and demolition. We anticipate that the shift toward compliant trade will deprive the aging non-compliant shadow fleet of employment, likely accelerating the retirement of substandard tonnage and further tightening global vessel supply. These two teams in combination could shrink the working fleet by 10%, maybe 15% of capacity. Energy security and inventory replenishment, a heightened focus on national energy security could trigger long-term crude oil inventory building, supporting transportation demand beyond immediate consumption needs.

This team will likely change customer behavior from just in time to just in case. And finally, what is DHT's strategic positioning. Consistent with the outlook presented in our previous reports, we observed that end users are increasingly seeking to secure vessel capacity in response to tightening market conditions. As you will have noted, we positioned our fleet for the first half of the year to seize on this development, capturing spot market rewards while selectively securing term employment to reduce volatility and enhance earnings visibility. The delivery of our four VLCC newbuildings this year is proving well timed with one vessel already commencing a long-term charter with a key customer.

Our disciplined capital allocation policy remains a priority, ensuring that the positive market development and our positioning will reward shareholders through quarterly cash dividends equal to 100% of ordinary net income. And with that, we open up for questions.Operator?

Operator: [Operator Instructions] Our first question comes from the line of John Chappell from Evercore.

Jonathan Chappell: So, starting with that last slide on strategic options, a quick 2-parter. Obviously, you signed a lot of contracts at rates that no one could blame you for. Could you just help with the Gazelle rate? It's the one that wasn't disclosed in the press release and can help with transparency. And two, I know you like to keep some spot market exposure, keeps you in the conversation, helps you understand flows. even though the rates are still somewhat elevated and generating fantastic returns. Do you think for the most part, you'd like to keep the remainder of the fleet in the spot you see in the information flow?

Svein Moxnes Harfjeld: Thank you, John. As for your first question on the rate on vessel, that is the explicit agreement with the customer not to disclose the rate. So we are not at liberty to do that. I apologize for that. Secondly, for this year, we are now sort of closing in on 50% cover on time charter. Keep in mind that two of those ships have base rate with profit sharing elements on top with no ceilings. So they are partly taking part in the spot market. When it comes to adding term business, we are quite content for now, and we might revisit this sort of later on.

But as of this moment, we are very satisfied with the general positioning of the company and the opportunities we see ahead.

Jonathan Chappell: Okay. Great. And then for a follow-up, just kind of understanding the operational challenges and opportunities since your last conference call. Obviously, we're seeing these headline rates that are eye-watering, but they're very inconsistent depending on where the source is. When we see a headline rate, do we assume that, that's something that DHT can achieve? Or do we have to take into account maybe some theoretical elements of that? Is there more waiting time or ballast time as you're moving the fleet around to areas that are maybe safer for the crew and also taking into account bunker fuels. Just trying to understand when we see a number, is that a number that you can really get?

Or is there a lot of different elements in it that maybe it's not quite the headline rate?

Svein Moxnes Harfjeld: Yes. So the most referred to index and route has been what is called TD3C which is cargo loaded in Saudi Arabia and discharged in China. Obviously, that route has not really been operational in general terms of the market with some exceptions, obviously, as many shipowners were not entertaining to enter the person Gulf. So it has been produced a derivative pricing on two other sort of load ports in the region, one being Yandu, which is in the Red Sea, i.e., the Western load ports of Saudi Arabia. And secondly, Fujairah, which is outside of the strait of Hormuz, which is in the UAE.

So those pricings have been below the TD3C, but certainly related to that there's many similarities to the trade. But I think it's fair to say that there's a limited number of ships that have captured what the TD3C index has referred in the market. That's just the nature of how the game has been played in the last few weeks. So on our part, we managed to keep our fleet efficient without any operational disruptions. We have not taken on any excessive ballast or cost or expenditure to keep our fleet going. We're trying to -- as good as we can to be sort of ahead of the game a bit.

We've done a fair amount of business from the Atlantic, where we also have a big COA with export of oil from the Atlantic Basin to Asia. So that has sort of occupied also a few ships. So on our part, we haven't really been impaired on our earnings, if I can say it that way.

Operator: Our next question comes from the line of Sherif Elmaghrabi from BTIG.

Sherif Elmaghrabi: Starting with the fleet, your fleet, the sale of your oldest vessels lines up pretty nicely with the delivery of newbuilds this year. So looking ahead, I'm curious how you're thinking about continued fleet growth. It seems like there's a fair amount of on the water opportunity, but maybe that tonnage skews older.

Svein Moxnes Harfjeld: Yes. So we are very happy with the fleet that we have, and there are no ships in our fleet that are planned for divestments. We have a balance sheet that is sort of able to entertain fleet growth. So we're always on the lookout for opportunities. Right now, that's been very hard to find, frankly. I wouldn't say because there's been other competing buyers for ships, but the competition has been a very healthy freight market. So potential sellers have opted to retain their ships in their operation to earn money simply. But as I said, we would like to continue to build the DHT.

So at some point, hopefully, there will be opportunities for us to invest in additional ships for the fleet.

Sherif Elmaghrabi: Got it. And then second question, you talked about the risk premium from the war in Iran. Obviously, that -- hopefully, that ends sooner rather than later. But whenever it does, how quickly could we see activity return to the Gulf? And -- more specifically, obviously, charters want you to go back as soon as possible. But what are some of the puts and takes there that you have to consider things like mariner risk or insurance coverage, stuff like that?

Svein Moxnes Harfjeld: I think we need to see a high level of credibility to a resolution to the conflict and that we can expect whatever agreements that will be put in place will have -- they can last because in all fairness, the news flow over these last 2 weeks have been rather volatile with good news, bad news almost trading each other every second day. So we cannot sort of react, I think, to good news one day and assume we can all sort of enter in the second day and the market sort of goes back to normal. And I don't think we will be alone in consider the situation like that.

So credibility to sort of a solution has to be in place. And I think that, that will take a bit longer than just a few more days, right? So I think the key action we need to see now, of course, is that all these ships that are trapped inside the Gulf that they can exit safely. That will take a while. We believe there are some 57 VLCCs inside the Gulf with cargo that is waiting to exit, plus there are a lot of other ship types and not only tankers, but also inside that are waiting to sort of resume operations.

So I guess a lot of this has to be unwind, if you like, for -- to demonstrate that the passage to the strait is safe.

Operator: And our next question comes from the line of Omar Nokta from Clarksons.

Omar Nokta: Maybe just a follow-up a little bit on kind of the discussion points of Hormuz and risk premiums. Are you able to talk a little bit about how, from your perspective, the risk premium across the different routes for getting inside Hormuz since that's not really transacting. But outside of that, you mentioned Yanbu, Fujaira. Can you just talk a bit about how that risk premium has developed as this crisis has gone on and then also your willingness to transact in those areas?

Svein Moxnes Harfjeld: Yes. So firstly, to entertain trades inside the strait of Hormuz was a non-starter for us. We think it's also a very easy decision. We have 25 on average on our employees on board the ships and to expose them to trades like this is not something we are willing to discuss. So secondly, I think initially, Yanbu, Fujairah also had at least some academic risks to these areas. As people have gotten a bit more comfortable with these areas, those freights have sort of moved differently from where sort of the person Gulf freight potentially could be. So it's now closing in to be sort of more aligned with what Atlantic trades are offering.

So now -- as of now, there's not a really big delta between this. There could be some positional issues and stuff like that. But I see there's some more normalization in pricing in those two routes, i.e., Fujairah and Yanbu compared to the rest of the markets.

Omar Nokta: Okay. And then how do you think, I guess, about in a reopening scenario, and let's say, things go back to normal, which clearly seemingly that seems difficult to anticipate. But just how do you think about the permanence of these new routes or at least these routes have gotten a bit more active? Do you think these are here to stay? And what do you kind of think about how that affects this market long term?

Svein Moxnes Harfjeld: Yanbu in the Red Sea has the capacity to sort of super efficient operation, about 4 million barrels a day, so they can load 2Vs a day. That is not a new trade. That terminal has been there for many years, have been serving certain markets, maybe not to its full capacity though. So I think whether that route is keeping that capacity or whether some of that cargo shifted back to the Gulf doesn't really impact the general efficiency of the market because it's a very similar type of duration for those voyages. When it comes to Fujairah, I think in the near term, it's a bit hard to say.

But what we would be curious to see how UAE's exit from OPEC will sort of unfold. I think they have had ambitions for quite some time to increase their quotas. And as they now become free from OPEC, they will, of course, also be free to decide how much they will produce. And whether that will go out of Fujairah only or also from the ports inside, we don't know yet exactly the ratios and how that will play out. But -- but I think we should expect there to be more cargo in the water in general. And maybe that will have a downward pressure on oil price, but which will stimulate our business in general.

The next question comes from the line of Geoffrey Scott from Scott Asset Management.

Geoffrey Scott: I have a question about the couple of ships that are on long-term charter with profit sharing. I've always thought that the 50-50 break for profit sharing was a very fair division of kind of risk and reward for the long-term chartering market. But it requires some estimate of what that profit sharing is. How do you get to the profit sharing number? Index?

Svein Moxnes Harfjeld: Thank you for asking. So we don't disclose the details of these contracts. But the profit sharing mechanism is calculated on our ships particular specification for fuel consumption and efficiency, all of that. And it is the index-based profit calculation. So one charter has only one index as sort of at the pricing base and the other one has a mix -- so -- but none of these contracts are frustrated in any way by the call it, changes we have seen recently. And we also noted that there somebody now trying to pursue Baltic legally. -- whether that is -- whether that case has a probability of going one or the other way, I don't know.

But again, the basis, which is the price mechanism in our charters are operational, and we get paid by our customer, and there's no frustration in these systems.

Geoffrey Scott: There is no conflict in that conversation.

Svein Moxnes Harfjeld: No.

Operator: There are no further questions at this time. So I'll hand the call back to Svein for closing remarks.

Svein Moxnes Harfjeld: Thank you very much to all for being interested in DHT, and wishing you all a good day ahead. Thank you.

Operator: This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.