DHT Holdings, Inc. (DHT) Q4 2025 Earnings Call Transcript
Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
Overview
The earnings call highlights strong financial health with significant liquidity, low financial leverage, and strategic fleet management. The Q&A section underscores robust demand for seaborne crude transportation and potential market consolidation benefits. Despite some uncertainties, such as Venezuelan oil flow and fleet demolition protocols, the overall sentiment is positive with optimistic market outlook and strategic positioning, likely leading to a stock price increase of 2% to 8%.
Key Financial Performance
Revenues on TCE basis (Q4 2025) $118 million, with no specific year-over-year change mentioned.
Adjusted EBITDA (Q4 2025) $95 million, with no specific year-over-year change mentioned.
Net Income (Q4 2025) $66 million, equal to $0.41 per share, with no specific year-over-year change mentioned.
Vessel Operating Expenses (Q4 2025) $17.1 million, with no specific year-over-year change mentioned.
G&A Expenses (Q4 2025) $5.6 million, including $0.6 million in nonrecurring project costs, with no specific year-over-year change mentioned.
Spot Market Earnings (Q4 2025) $69,500 per day, with no specific year-over-year change mentioned.
Time-Charter Earnings (Q4 2025) $49,400 per day, with no specific year-over-year change mentioned.
Average Combined TCE for Fleet (Q4 2025) $60,300 per day, with no specific year-over-year change mentioned.
Revenues on TCE basis (Full Year 2025) $369 million, with no specific year-over-year change mentioned.
Adjusted EBITDA (Full Year 2025) $278 million, with no specific year-over-year change mentioned.
Net Income (Full Year 2025) $211 million, equal to $1.31 per share. Adjusted net income was $158 million, equal to $0.99 per share, reflecting gains related to the sale of vessels.
Total Liquidity (End of Q4 2025) $189 million, consisting of $79 million in cash and $110.5 million available under revolving credit facilities.
Financial Leverage (End of Q4 2025) 17.6%, based on market values for the fleet.
Net Debt (End of Q4 2025) Just under $16 million per vessel, well below estimated residual values.
Cash Flow (Q4 2025) Started with $81 million in cash, generated $95.3 million in EBITDA, repaid $13.2 million in debt and interest, distributed $28.9 million in dividends, deployed $97.6 million towards vessels, issued $169.4 million in long-term debt, and ended with $79 million in cash.
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Operating Highlights
Newbuilding Program: DHT Holdings is executing a newbuilding program with 4 new VLCC vessels entering the fleet in the first half of 2026. The first vessel, DHT Antelope, was delivered on January 2, 2026, and has demonstrated excellent fuel economics. The remaining 3 ships are scheduled for delivery in March and June 2026.
Fleet Modernization: DHT has sold 3 older vessels built in 2007, including DHT China and DHT Europe, for a combined price of $101.6 million. The company expects to record a combined gain of $60 million from these sales.
Spot Market Exposure: DHT is increasing its spot market exposure to approximately 75% of its capacity by the second quarter of 2026, allowing greater participation in the rewarding spot markets.
VLCC Fleet Consolidation: The VLCC market is undergoing consolidation, with private actors gaining control of approximately 120 ships. This consolidation is impacting freight rates, customer demand for time-charters, and secondhand VLCC values.
Financial Performance: In Q4 2025, DHT achieved revenues of $118 million on a TCE basis, adjusted EBITDA of $95 million, and net income of $66 million. For the full year 2025, revenues were $369 million, adjusted EBITDA was $278 million, and net income was $211 million.
Cash Flow and Liquidity: DHT ended Q4 2025 with $79 million in cash and $110.5 million available under revolving credit facilities. Total liquidity stood at $189 million.
Market Positioning: DHT is reducing fixed income contracts and increasing spot market exposure to capitalize on strong market conditions. The company is also benefiting from a structural transformation in the VLCC market, including fleet consolidation and aging global fleet dynamics.
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Risk or Challenges
Fleet Modernization: The company is divesting older vessels and replacing them with newbuildings. However, this transition involves risks such as potential delays in newbuilding deliveries, operational disruptions during fleet adjustments, and challenges in selling older vessels at favorable prices.
Market Exposure: The company is increasing its spot market exposure, which, while potentially lucrative, exposes it to greater market volatility and unpredictable freight rates.
Aging Fleet: A significant portion of the global VLCC fleet is aging, with many vessels nearing or exceeding 20 years of age. This could lead to increased competition for newer, compliant vessels and potential oversupply issues if older vessels remain operational.
Geopolitical Volatility: Geopolitical factors, including sanctions and changes in oil market dynamics, could impact the availability and demand for VLCCs, creating uncertainty in operations and revenue.
Regulatory Compliance: The company must ensure its fleet complies with evolving environmental and operational regulations, which could require additional investments and operational adjustments.
Supply Chain Constraints: Delivery slots for new VLCCs are already extended to 2029, indicating potential supply chain constraints that could delay fleet expansion or modernization plans.
Consolidation in the Market: The ongoing consolidation of the VLCC fleet by private actors could shift pricing dynamics and create challenges in securing favorable contracts or maintaining competitive positioning.
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Guidance & Outlook
Estimated P&L and cash breakeven levels for 2026: The spot cash breakeven for the year is estimated at $17,500 per day, reflecting the sale of 3 older vessels and 7 special surveys scheduled during the year. The difference between P&L and cash breakeven is estimated at $6,700 per day, totaling about $56 million for the year. This discretionary cash flow will remain within the company for general corporate purposes.
Bookings for Q1 2026: 797 time-charter days are covered for the first quarter at an average rate of $43,300 per day. 1,195 spot days are anticipated for the quarter, with 76% already booked at an average rate of $78,900 per day. The spot P&L breakeven for the quarter is estimated at $18,300 per day.
VLCC fleet demographics and market outlook: The current VLCC fleet consists of 897 ships, with 46% older than 15 years and 20% older than 20 years by the end of 2025. By the end of 2029, assuming no scrapping, 528 VLCCs will be older than 15 years and 303 older than 20 years. The order book includes 171 ships delivering over the next 3 years, with delivery slots for new VLCCs now extending to 2029. The company believes the supply squeeze to be real and expects fleet consolidation to continue, impacting freight rates, customer demand, and secondhand VLCC values.
Spot market exposure and fleet strategy: DHT plans to increase its spot market exposure to approximately 75% of its capacity during the second quarter of 2026. This strategy aims to capitalize on rewarding spot markets and develop new time-charter contracts at improved rates.
Delivery of newbuildings: Four state-of-the-art VLCC newbuildings are scheduled for delivery during the first half of 2026, with two in March and one in June. These newbuildings are expected to enhance fleet efficiency and are financed without issuing new shares.
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Shareholder Return Plan
Dividend for Q4 2025: The Board has approved a dividend of $0.41 per share for the fourth quarter of 2025. This marks the 64th consecutive quarterly cash dividend. The shares will trade ex-dividend on February 19, and the dividend will be paid on February 26 to shareholders of record as of February 19.
Capital Allocation Policy: The company follows a policy of paying out 100% of ordinary net income as quarterly cash dividends. Since the policy update in Q3 2022, the total accumulated dividend is $3.34 per share.
Share Repurchase: No share repurchase program was mentioned in the transcript.
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Key Q&A
Q:Can you reconcile the commentary about consolidation and increasing spot exposure to 74% with the strong time-charter market?
A:Svein confirmed that all end users or customers are in the market to secure time-charters for 1-3 years at rates above the last bump. Aggregators are not offering ships for time-charter, and there are rumors of a 1-year charter at $85,000 a day. Customers are concerned about reliability and access to ships, leading to a dynamic market.
Q:Is the demand commentary more about ton-mile demand, disruption, or underlying robust consumption?
A:Svein explained that the 1% global oil demand growth figure refers to total liquids, but seaborne crude oil transportation is around 41 million barrels a day. The additional 1 million barrels of crude oil will be seaborne, reflecting a 2.5% demand growth. He also highlighted the impact of distances and production growth in regions like Guyana and Brazil.
Q:Can you clarify the definition of the compliance fleet and the aggregator's control of 25%?
A:Svein clarified that the compliance fleet excludes the sanctioned fleet and state-owned fleets like China Inc., Saudi Arabia, and Japan Inc., which are not in the regular spot market. The compliant tramping fleet is estimated to be around 600 ships, and the aggregator's control of 25% is based on this adjusted fleet size.
Q:Will the aggregator add more ships to reach 25% control?
A:Svein mentioned that the aggregator is looking to acquire additional ships and has ambitions to do more, but DHT is not selling any more ships.
Q:Is 25% control enough to shift market dynamics, and how?
A:Svein believes 25% control is enough to change dynamics due to the different pricing behavior and information flow from aggregators acquiring ships in the 10-15 year age bracket. This consolidation could lead to a more structured market.
Q:Are there further buyers at current ship values, and how are vessel values maintained?
A:Svein stated that there are other buyers for older ships and modern secondhand ships, with competition driving up prices. Current time-charter rates justify these values, and the market remains bullish.
Q:Has the consolidator been looking at more modern or younger tonnage?
A:Svein believes the consolidator has been rational in focusing on the 10-15 year age bracket for significant cash returns. He assumes they may also consider more modern tonnage but has no specific information.
Q:What is the impact of Venezuela's crude flow changes on the market?
A:Svein noted that initial Venezuelan barrels are likely to go to the U.S., but China may also claim some due to debt repayment agreements. Traders like Trafigura and Vitol are involved, and production ramp-up will take time. This development is expected to benefit the market.
Q:Is there a process for mainstream fleet companies like DHT to move Venezuelan oil?
A:Svein stated that companies like Trafigura and Vitol would hold the title to the oil, ensuring no OFAC risk for DHT. However, no such movements have occurred yet.
Q:What is the ideal level of debt for DHT, and how does it relate to investments?
A:Svein emphasized maintaining capacity for investments and a meaningful delta between P&L and cash breakeven. Current leverage is in the teens to market value and 26.5% to book. DHT aims to grow organically without relying on new shares.
Q:Where do you see newbuild prices headed, and are Chinese-built vessels of interest?
A:Svein estimated newbuild prices at around $130 million for delivery in 2029. DHT has no issue with Chinese-built vessels but prefers experienced yards. Decisions are pending clarity on U.S.-China trade issues.
Q:Has there been any resolution of protocols for demolishing the noncompliant fleet?
A:Svein mentioned that one of the largest cash buyers is seeking approvals to transact with sanctioned counterparties for demolition. The process has started, but no specific timeline is available.
Q:Review of Unclear Management Responses
A:Management avoided providing a clear timeline or specifics on the resolution of protocols for demolishing the noncompliant fleet, citing a lack of knowledge about the process and political support required.
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Earnings Word Cloud
The most frequently occurring keywords in this quarter's earning call
Antelope Class
Bauhinia vessel
CFO reminder
Cash proceeds
Changes capital
China DHT
China gain
Class fuel
DHT Bauhinia
DHT China
DHT rock
Europe day
Europe price
Form report
GA project
Hyundai delivery
RCF capacity
RCF end
TCE fleet
VLCC Hyundai
acquisition term
addition newbuilding
agreement DHT
agreement quality
appreciation update
availability RCF
breakeven day
gain sale
market vessel
month
newbuilding program
rate day
sale vessel
sharing
side slide
year
DHT Transcript
DHT Holdings, Inc. (DHT) Q4 2025 Earnings Call Transcript
Positive2-5
The earnings call highlights strong financial health with significant liquidity, low financial leverage, and strategic fleet management. The Q&A section underscores robust demand for seaborne crude transportation and potential market consolidation benefits. Despite some uncertainties, such as Venezuelan oil flow and fleet demolition protocols, the overall sentiment is positive with optimistic market outlook and strategic positioning, likely leading to a stock price increase of 2% to 8%.
DHT Holdings, Inc. (DHT) Q3 2025 Earnings Call Transcript
Unknown10-30
The earnings call reveals stable financial performance with no significant year-over-year changes, and a consistent dividend payout policy. However, the lack of growth in revenues and EBITDA, coupled with uncertainties around Chinese port fees and tariffs, tempers optimism. The Q&A section highlights management's cautious outlook and lack of clear guidance on some issues. Despite a potential market turnaround in 2025, the immediate outlook remains uncertain. Given the market cap, the stock is unlikely to show strong movement, resulting in a neutral sentiment.
DHT Holdings, Inc. (DHT) Q2 2025 Earnings Call Transcript
Positive8-7
The earnings call and Q&A reflect a positive outlook: strong financial metrics, strategic fleet management, and optimistic market conditions. Despite some unclear management responses, the company's strategic moves, such as securing time charters and focusing on value creation, indicate resilience. The dividend declaration and favorable financing terms further bolster investor confidence. The market cap suggests moderate sensitivity, aligning with a positive stock price reaction.
DHT Holdings, Inc. (DHT) Q1 2025 Earnings Call Transcript
Positive5-7
The earnings call reflects strong financial performance with increased net income, stable operating expenses, and improved liquidity. The company has a positive outlook with a shrinking VLCC fleet and increased demand. The Q&A highlighted strategic fleet management and market opportunities. While some management responses lacked clarity, the overall sentiment is bolstered by strong financial metrics, favorable market conditions, and a consistent dividend policy. Given the market cap of $1.9 billion, the stock is likely to see a positive movement (2% to 8%) over the next two weeks.
DHT Slides
DHT Report
Frequently Asked Questions
Where does this earnings call transcript come from?
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They are generated by a specialized financial-language model trained exclusively on 15+ years of earnings transcripts. The model extracts financial figures, guidance, and tone with 97%+ accuracy and is regularly validated against human analysts. The full raw transcript always remains available for verification.
