- DHT Holdings was one of the big winners from the record oil oversupply earlier in 2020.
- This naturally cannot last with oil tanker day rates falling again, but thankfully, the surge in free cash flow dramatically reduced their net debt, thereby leaving a permanent massive improvement.
- This has left their financial position in quite a good shape and provides the flexibility to return cash to shareholders.
- The biggest drawback is the sheer uncertainty surrounding their cash flow in the short and long term and thus shareholders should still keep their expectations modest.
- Given this situation, I believe that a neutral rating is appropriate as their future could easily lay in either direction from this point.
For further details see:
DHT Holdings: Massive Improvement To Financial Position But Keep Dividend Expectations Modest