And good day, and thank you for standing by. Welcome to the Q4 2024 DHT Holdings, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question and answer session. On your telephone, then hear an automated message advising your hand is raised. To withdraw your question, please press star one and one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Laila C. Halvorsen. Please go ahead. Thank you. Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings fourth quarter 2024 earnings call. I'm joined by DHT's President and CEO, Svein Moxnes Harfjeld. As usual, we will go through the 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 on our website dhtankers.com, until February thirteenth. 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 as detailed in our financial report. Actual results may differ materially from 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. As usual, we will start the presentation with some financial…

Thank you, Laila. I will talk about our business update. During December, we took advantage of the soft period in the capital markets to repurchase our own shares to the tune of 1.5 million shares, just shy of 1% of the company. The average price was $8.89, almost $3 lower than yesterday's closing price, and accretive to earnings per share and net asset value by a good margin. We entered into an agreement to sell our older ship, the DHT Scandinavia, built in 2006 for a price of $43.4 million. The vessel was debt-free and we expect the sale to generate a book gain of about $19.8 million. The cash proceeds will be allocated to general corporate purposes, including investments in vessels, share buybacks, and prepayment of debt. The vessel was delivered to our new owners during January. During the quarter, we paid $12.8 million in installments under our newbuilding program, taking total installments during 2024 to $90.1 million. Subsequent to the quarter, we secured a one-year time charter for DHT China, built in 2007, at $40,000 per day. The contract commenced towards the end of January. On this slide, I want to discuss capital allocation and dividends specifically. The dividend for the fourth quarter of 2024 is declared at $0.17 per share. This is as per our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividends and marks our sixtieth consecutive quarterly cash dividend. Shares will trade ex-dividend on February 18 and the dividend will be paid on February 25. In the graph to the left, we update our estimated P&L and cash breakeven levels for 2025. As you will see, the difference between the two is estimated at $7,000 per day for the year. This discretionary cash flow will remain in the…

Thank you. If you would like to ask a question, you will need to press star one on your telephone. We will start with our first question. This is from the line of Jonathan Chappell from Evercore ISI. Please go ahead.

Thank you. Svein, since the last call, when I asked about, you know, kind of fleet development, you've sold the Scandinavia and then you locked into China. So it seems like you're derisking some of the older vessels in your fleet. As we think about going forward, differences now, in maybe the optimism around asset values and time charter market. What do you think is the best path forward for, again, kind of the older ships in your fleet or maybe you don't need as much spot exposure. Is monetizing them a better alternative versus the time charter market or vice versa?

So we have now three ships built in 2007 in our fleet. Two of them are on time charter. One which we talked about on this call, $40,000 a day for this year. And the one that started last summer, which is ending end of second quarter at $49,500 per day. So these are two very good time charters. The third vessel is in the spot market. So, you know, we might consider divesting one or two other ships, you know, depending on time and price, obviously. So the two on time charter will continue to operate at least through their charters. But they also, these ships have basically no debt, so there is sort of an interesting way to monetize that and then reinvest the money in the company in one way or another in alignment with our capital allocation policies in general. So that's really all I can say now, but it's not that easy to sell all the ships. You might have an interest that you might be a counterparty you cannot transact with also. So that sort of raises the hurdle a bit to get it done.

Right. Yeah. That makes sense. And then so far as the new builds are concerned, seeing the progress payments and what's laid out for the next twelve months, and you still have some time. But what was the kind of the model financing plan for those ships, number one? And number two, just given the fuel efficiencies of them, etcetera, have you received any interest thus far on potentially locking those in, or is the plan to keep them kind of the optionality of using the spot market next year?

Thank you. So the base case for debt financing those ships is $60 million per vessel. But the chances are we might up that somewhat. And that's based on the negotiations we have now on the financing that's intended to be put in place. So if we finance more than the $60 million, we will then reallocate how the debt is distributed in the fleet potentially. So it should be a very good outcome for the company. And we are quite excited about the terms and the commercial pricing of what we expect to put in place. Our target is to close this at some point in the second quarter of the year. So in general, we have great support from our banking group and have several proposals on the table. Your next question was on the fuel efficiency of these ships and whether we have received any interest. So in general, there is significant interest for time charters. There are two clients in particular that have shown interest in the new buildings, but it's too early to say whether this is something we can execute on. As normal, there's always a bit of a delta between what the customer wants and what we want. So but I think with the tailwind from the spot market going forward now, it should be possible to get to something that could make very good both commercial and financial sense for DHT.

Mhmm. Great. Thank you, Svein.

Thank you.

Thank you. We'll now take our next question. This is from the line of Frode Mørkedal from Clarkson Securities. Please go ahead. Frode Mørkedal: Hello? I think your line is not connected through. Yeah. Now I can hear you.

Okay. Perfect. First question, can you just talk about the recent jump in VLCC spot rates? And, yeah, whether you think these levels are sustainable, what's driving the strength, and how do you see the market developing from here?

I think the market in general is very, very tight.

And, you know, this sort of downward trajectory we had in the end of last year was mostly driven by some inventory changes and the lack of runs in the refineries in China. But those inventories seem to have been worked off, as you can now see on the refining margins in China. So that's one aspect. The other is, you know, as I mentioned, the market is tight and finely balanced, and it didn't take much to bring the market down in one way. But more importantly, it didn't take much to bring the market up. So the sentiment in particular in the reaction to sanctions was very dramatic. The market moved very, very fast without, you know, necessarily more cargoes in the market, but just some expectations. We had a little bit of a setback, but then we are back up again. And now we feel that there's more substance in it. There's more cargo in the market. At the same time, as I talked about in detail, the fleet is really, really getting tighter and tighter, and there's so many pieces to the puzzle now. It's a bit hard to be precise on which component is the driving factor, and I prefer to look at it more like the tipping point, you know, at the glass. At some point, it's just full. Right? And it's overflowing. So in a way, that's what I think we are seeing, you know, potentially the beginning of. Frode Mørkedal: That's good to hear. Next is on the capital allocation. You talked about it, I guess, but you sold the ship in December, and you used the proceeds to buy back shares at, you know, very attractive levels, I would say. So that made a lot of sense. Of course, now I'm just talking back to your one-time NAV more or less. So the question is, do you see better opportunities elsewhere, like secondhand vessel transactions or are buybacks still on the table?

So I think just to clarify, the buybacks we did in December, they were done with the resources at hand. They were not dependent on us selling the ship, but we felt there was a dislocation in the capital markets compared to the underlying dynamics of our business. So when we traded below nine bucks, we were acting on that. And I think in hindsight, that proved to be a very good decision. As we also then stated, we saw three purposes for the cash proceeds from the sale of Scandinavia. It's either investment decisions as you asked about, the buybacks or debt prepayments. Where the share price is pricing now, we are normally not buying back stock. We are always on the lookout for good investment opportunities in ships. But they are, you know, hard to find, frankly. As the number of aspects that have to be met in terms of age, ship design, delivery, etcetera, and price, of course. But we have the capacity financially to do that if we want to. Then lastly, of course, and this debt prepayments. That would reduce interest expense in the company. And it's a detailed question of whether we then increase our RCF capacity so we can access the funds to other activities later if we want to. Or as we've done many times in the past, focus the prepayment on taking out installment schedules or annual over certain periods. So we are yet to finally decide on that, and we will maybe be more clarifying on that when we present our first quarter earnings. Frode Mørkedal: Okay. Great. That's clear. Thank you.

Thank you.

We'll now take the next question. This is from Omar Nokta from Jefferies. Please go ahead.

Thank you. Hi, Svein. Good afternoon. Just had a follow-up on Frode's first question. You know, you're talking about the VLCC rates basically jumping here over the past maybe four or five weeks to, you know, the $55,000 to $60,000 range as you outlined. You mentioned that, you know, a big reason for that has been, you know, sentiment and then also just the fact that there's more cargo. What about in terms of just the actual sanctions themselves? Part of it obviously sentiment, but have we seen an effect of that yet on rates as in we're seeing ships removed from service and that's partially why rates are rising or is that not even taking place?

I think, yeah, you're right in saying that the primary driver at this early phase has been sentiment. But then we are seeing, as I alluded to here, some change in behavior in China, in how they procure oil. I.e., that means from whom or from which countries. And that also will relate to how it's going to be transported. So there were sanctions that you might have seen for the Shandong refinery complexes. Meant that ports could not take in ships that were sanctioned. So that is a real thing. Secondly, we understand that there are some tax issues with several of these refiners. That means that they will either face bankruptcy or transfer ownership to maybe state-owned entities. And this is already changing or driving the way oil is being procured. So that's why I'm saying I think there is also increased oil demand now, and this is at the early innings, I think, for what's at play here going forward.

Okay. Thank you. And then just to, you know, second question just on slide ten where you outlined the VLCC fleet and how it's developing. The shadow fleet, you have the 105 and then you have the 92 that are sanctioned. Any sense are you able to see what, say, the shadow fleet is trading, you know, those 105 VLCCs how they're trading at that age market, and then also what the other 92 are doing.

It's hard because there's no AIS to track. Right? So it has to be sort of physically seen or through satellite images, and you need to be live on this. And it is not the task for DHT to do in detail. But I think we want this fleet is very inefficient. So and with that, I don't think we should assume sort of one-for-one change. If a sanction barrel or a sanction ship is shifting to a non-sanctioned barrel, there can be more efficiency out of that exact ratio. It's hard to be specific on. But the compliance fleet obviously is more efficient or more productive, if you like. So that again, I just if you look at just the gradual shift now in sort of the gravity, and we also seen reports of some of these ships now being sold for demolition early on. We understand there are, you know, other discussions with brokers or breakers for some additional ships. So I think DHT stated earlier on that we looked at this shuttle fleet as sort of the new scrapping. In sort of in waiting until actual scrapping takes place, and that might be the case now.

Okay. And maybe just sorry. One final one just on the just looking at the table. You know, at the end of next year, you'll have 184 VLCCs in the fleet that are twenty-five years or older. Do you can you envision those ships sticking around once they hit that age or are they scrapped?

No. You have to have a trade where actually it's commercially possible to do it. And keep in mind one thing, it's not just whether the customer using the ship can say, I'm okay with the twenty-five-year-old. But you cannot nominate that ship to lift the cargo from, say, Saudi Arabia or from ports in West Africa or US or whatnot. Because the terminals did not, you know, accept most of these ships. And it's the same in most discharge ports. You know, where you know, approval by the receiving facilities is also part of getting a deal done on the cargo. All of this is just becoming very difficult. I have a very hard time to think that there are any commercial opportunities for this ship, maybe with a few exceptions. But the majority, I think, will be out of business.

Okay. Alright. Well, very good. Thank you, Svein.

Thank you, Omar.

Thank you. Your next question is from the line of Petter Haugen from ABG Sundal Collier. Please go ahead.

Good afternoon, Svein. Quick question on prices as we've spoken about now. On the rate side, it's been lots of volatility. But in terms of the quoted prices for at least newer usage tonnage, nothing much has really changed over the past few months. If you were to sell or buy, so what I'm guess I'm asking is the price of in the next transaction. Of a newer resale VLCC, what would that contact us today, I think, if it were top of.

So when you say resale, that assumes that it's sort of from delivery, so delivery now. So that will have to be one of the five ships that are scheduled to be delivered this year. And some of those ships are already, you know, out on time charters. I think that likely, though, getting hold of one of those as a resale, it's gonna be difficult. There are, you know, some opportunities for maybe 2026 delivery, to pick up a ship under construction. From would say, shipyards in China that have not built these before. So then you need to be a buyer willing to, you know, venture out in search of transaction. And given the fact that VLCCs have no experience, it will be at the lower price than, say, if the ship that come from Korea or from an experienced yard in China. So the liquidity in this game is very, very thin. If we wanted to buy a five-year-old ship, you know, there are maybe potentially some things that can be done. But it's not like a full range of access to pick up. Right? So liquidity is thin. There is quite good liquidity on the buying side for ships that are sort of closing in on fifteen years, that are twelve, thirteen, fourteen years, and there are a few buyers. And there's still some buyers in the ships that are yet to be twenty, but still have sort of couple three years left in them. And I think that with all this sort of political stuff going on, there will be a need, you know, for some of the people that have been operating either on the fringes of this market or in it to renew themselves. So I think there will be continued sales of ships that are maybe a tad younger than some of the ships that are in that fleet. So ships that are built in 2005, 2006, 2007, 2008, 2009 maybe.

Okay. But if I were to post a question like this, I have a five-year-old ship which I'm asking or of which price is $114 million. Would you then be a buyer or seller at $114 million, which is the price we would use for a five-year-old ship in valuation of the VLCC company today.

You really expect me to comment on that?

Okay. Okay. No. My intention was simply just to get a sort of feeling for whether these prices we now use is in the marketplace, too high or too low. But we'll continue to use them. It's fine. If I can follow-up with another narrow request in here, in an event in which we'll see some deal being done, making Russian oil available again. Is it possible now to sort of and I understand that this is going to be speculation more than anything else, but for the VLCC market, I mean, the VLCC market didn't experience the same uplift when Russian oil was sanctioned. So I'm trying to figure out how the impact of Russian oil potentially then being not so sanctioned again will make an impact on the VLCC market here.

Yeah. I understand your question. So I think the key sort of restrictions that drove this, you know, this dislocation earnings between Aframaxes, Suezmaxes, and VLCCs over these last two, three years was that the primary loading areas of Russian oil in the Baltic Sea and Black Sea accommodate VLCCs. If those, you know, oceans have been able to accommodate VLCCs, I tell you the VLCCs would have gone to India and China with sanctioned oil. But that was not possible. So if Russian oil is for some reason, not gonna be redirected back to Europe. That will, you know, be much shorter hauls. For the ships that have been engaged in long hauls in the smaller sectors such as Aframax and Suezmaxes. And the oil currently going to Europe will then go out to Asia again, will be used on the VLCCs. Hence, my comment that I think the VLCCs are the ones to stand out as the winners in what's going on now, how things develop. So and it might be a little bit hit on the nose some of the smaller ships.

Okay. Thank you. Thank you, Svein.

Thank you. And the last question today is from the line of Greg Lewis from BTIG. Please go ahead.

Yeah. Hi. Thank you. Good afternoon, and thanks for taking my questions. You know, I guess that my first question is around the comments you made around, you know, maybe an increasing in demand in the time charter market, you know, I guess earlier last month there was a trader that came in and took a couple vessels. You know, I think it was for six, seven months maybe. Just as you see the time charter market developing, you know, your view is a lot more insightful than ours. You know, could you maybe are there is it largely traders coming into this market? Are there captives that are coming in? And is it, hey, there's a new US administration, and you tell what? The next couple quarters are gonna be messy. Or is it, kind of some of the fundamentals that you're laying out where hey. Supply looks tight for the next couple of years. And really what I'm wondering is are customers or potential charters starting to look to get a little bit longer?

Mhmm. Yep. I understand. So then the traders, they are basically always in the market, and a lot of their pricing is driven by how the forward curve is looking or what they can do in the FFA market. Because they typically sort of take off some of the exposure in the FFA market to take a profit and whatnot. But I think what's gradually developing is that a number of the end users, i.e., you know, oil companies or refiners, and some of their time charter fleets are shrinking because time charters are expiring and they also have business that they need to sort of perform on. So they've been coming a bit light. Hence, you know, there are a number of end users, if you could use that expression, or IOCs that are in the market now and interested in building up the fleets or replacing ships that are expiring. So we always at DHT had a very serious customer focus and try to engage with all of our customers deeply, not just in the spot market. So I'm hopeful that there will be opportunities for us to develop some more fixed income for our fleet. Exactly how much we can do, rates to be seen, depends on the market. But there is real demand here from end users.

Okay. Great. And then just my other question was, it seems to be a non-event, but you know, I guess last month, the US put some Chinese shipyards under, like, a I guess, like, a blacklist or whatever. I think it was not sanctioned, but blacklisted. Does that create any impacts in terms of, you know, international trading companies' ability to use those yards for, like, drydockings and special surveys? I would think it doesn't, but I just want to clarify that.

Yeah. And, you know, I appreciate if you think that I can clarify it, but I'm afraid I'm not sure I can give you a credible answer to that. But I'm not so sure it's an issue. So at least not based on the information that's available to me now. So I'm sorry. I can't help you any further on that.

That was helpful in and of itself. Thank you very much. Have a great day. Thank you.

Thank you.

Thank you. There are no further questions, so I will now hand back to the speakers for any closing comments. Thank you.

Okay. Thank you all for dialing in to DHT's earnings call. Your interest and support is highly appreciated. Have a good day.

Thank you. This concludes today's conference call. Thank you for participating, and you may now disconnect.