DHT - DHT Holdings: Concentrated Fleet Strong Balance Sheet And Market Tailwinds

2024-01-25 04:36:54 ET

Summary

• DHT Holdings is a VLCC pure play with a fleet of 24 VLCCs, all equipped with scrubbers.
• In 4Q23, DHT's average TCE was $42,800 per day, 1.1% higher than in 3Q23. Time charters were fixed at 12.1% higher rates than 3Q23.
• The company has ample liquidity with $73 million cash, while 3Q23 delivered $55 million operating cash flow and $39 million operating income.
• DHT margins are average compared to its prime peers, Okeanis Eco Tankers and Nordic American Tankers. However, DHT excels in capital allocation, comparing total debt to capital and ROTC.
• The company trades at 107% P/NAV, 3.53 EV/Sales, 6.42 EV/EBITDA, and 1.73 P/BV.

Introduction

The tanker industry is genuinely diverse. Large companies like International Seaways ( INSW ) own crude and product tankers of various sizes. Small enterprises with concentrated fleets carrying only crude oil or petrochemical products are on the other side of the spectrum. DHT Holdings ( DHT ) is such an example. The company is VLCC pure play with its fleet of 24 VLCCs (very large crude carriers). The fleet's average age is ten years, and 100% of the ships are equipped with scrubbers. 77% of its fleet is contracted under spot contracts.

In 4Q23, DHT's average TCE was $42,800 per day, 1.1% higher than in 3Q23. DHT vessels were contracted at $43,6000 per day, which is a $1,100/day decrease in QoQ. Time charters were fixed at $39,600 per day, 12.1% higher than 3Q23. DHT contracted 50% of its spot days at an average of $56,300 per day for 1Q24. 1Q24 fleet composite TCE is 14% higher QoQ....

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