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DHT Holdings, Inc. fourth quarter 2016 results|
DHT Holdings placed an order for two very large crude carriers (VLCCs) with Hyundai Heavy Industries earlier in January.
DHT Holdings, Inc. (NYSE:DHT) ("DHT" or the "Company") today announced:
EBITDA for the quarter of $46.7 million. Net income for the quarter of $17.8 million ($0.19 per basic share).
The Company's VLCCs achieved time charter equivalent earnings of $37,100 per day in the fourth quarter of 2016 of which the Company's VLCCs on time-charter earned $41,400 per day and the Company's VLCCs operating in the spot market achieved $34,300 per day.
In accordance with DHT's capital allocation policy whereby the Company intends to return at least 60% of its ordinary net income to security holders, the Company repurchased $23.0 million face value of its convertible senior notes in the open market during the quarter at an average price of 90.4%. Additionally, the Company will pay a cash dividend of $0.08 per common share for the quarter payable on February 22, 2017 for shareholders of record as of February 14, 2017.
During the quarter the Company extended the time charter for the DHT Europe to an oil major for a period of 12 months from January 2017 at a rate of $31,250 per day.
On January 16, 2017 the Company took delivery of the last of its six VLCC newbuildings from Hyundai Heavy Industries. The vessel is named DHT Tiger and is trading in the spot market. A total of $48.7 million of debt was drawn in connection with the delivery of the vessel.
As previously reported the Company has sold the DHT Chris, a 2001 built VLCC for $23.7 million. The vessel was delivered to the buyers in January 2017 and is expected to retire from the trading fleet. The sale is in support of the company's fleet renewal program. $12.0 million of the net proceeds has been applied to repay debt and has been recorded as current portion of long term debt as of December 31, 2016.;
In January 2017 DHT entered in an agreement with Hyundai Heavy Industries for the construction of two VLCCs of 319,000 dwt scheduled for delivery in July and September 2018. The newbuilding contracts will be financed with cash at hand and bank debt; hence the Company does not intend to issue any stock in relation to this expansion.
It is DHT's policy to inspect all newbuildings, including underwater areas, during their respective warranty periods. During such routine inspection of the first newbuilding delivered, a fracture surrounding the inspection window of the rudder was identified. Following a root cause analysis conducted by the builder HHI and classification society American Bureau of Shipping (ABS), DHT implemented a permanent repair plan for a rudder design improvement on all six newbuildings. DHT completed the work on all of these ships in the fourth quarter 2016 and incurred a total of 105 off-hire days. The repair cost has been covered by HHI under its warranty obligation.
The Company has consumed $26.8 million of its securities repurchase program implemented in February 2016 and has elected to restore the capacity to $50.0 million and extended its validity through March 2018.
On January 27, 2017, DHT received a non-binding, highly conditional proposal from Frontline Ltd. (NYSE/OSE: FRO) to acquire all of the outstanding shares of common stock of DHT in a stock-for-stock transaction at a ratio of 0.725 of a Frontline share for each share of DHT.
In the proposal letter delivered to DHT's Board of Directors, Frontline also disclosed that it has acquired more than 15 million shares of DHT, or approximately 16% of DHT's outstanding common stock. Consistent with its fiduciary duties, DHT's Board will evaluate the proposal from Frontline and respond accordingly in due course. In light of the developments, DHT's Board has adopted a one-year shareholder rights plan to give the Board and DHT time to properly consider the proposal.
For further information please refer to the press release issued on January 29, 2017.