"DHT Holdings" Q2 2026 Earnings Call - Record Earnings Driven by Geopolitical Ton-Mile Expansion and Disciplined Capital Returns

Conference Call Operator: Good day. Thank you for standing by. Welcome to the Q2 2026 DHT Holdings Inc. earnings conference call. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there’ll be a question and answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will 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 Halvorsen, CFO. Please go ahead.

Laila Halvorsen, Chief Financial Officer (CFO), DHT Holdings Inc.: Thank you. Good morning and good afternoon, everyone. Welcome and thank you for joining DHT Holdings’ second quarter 2026 earnings call. I am joined by DHT’s President and CEO, Svein Moxnes Harfjeld. As usual, we will go through 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 August 13th. In addition, 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 the expectations reflected in these forward-looking statements. We urge you to read our periodic report 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 highlights. The second quarter of 2026 was by far the strongest quarter in the company’s history, reflecting strong tanker market conditions and commercial performance. In the second quarter, we achieved revenues on TCE basis of $255 million, and adjusted EBITDA of $231 million. Net income came in at $198.3 million, equal to $1.23 per share.

After adjusting for the non-cash fair value gain related to interest rate derivatives of $1.3 million, we had ordinary net income for the quarter of $197 million, equal to $1.22 per share. Vessel operating expenses for the quarter were $18.6 million, and G&A for the quarter was $5.6 million, which included approximately $0.7 million in non-recurring non-cash costs related to shares vested in the second quarter. In terms of market performance, our vessels trading in the spot market earned an average of $162,600 per day, while the vessels on time charters achieved $90,800 per day. The average combined TCE for the fleet in the quarter was $126,700 per day. Furthermore, revenue on a TCE basis for the first half of the year totaled $412.2 million, while adjusted EBITDA reached $364.3 million.

Net income was $362.9 million, exceeding DHT’s previous full year record earnings of $266.3 million achieved in 2020 and establishing a new earnings milestone in the company’s history. For this period, our vessels trading in the spot market earned an average of $124,700 per day, while the vessels on time charters achieved $77,300 per day. We achieved combined TCE for the fleet of $102,900 per day. We continue to maintain a very strong balance sheet, supported by conservative leverage and robust liquidity. At the end of the second quarter, total liquidity was $569 million, consisting of $161.7 million in cash and $407.5 million available under our revolving credit facilities. At quarter end, financial leverage was 14.1% based on market values for the fleet, and net debt was $11.9 million per vessel, way below estimated residual values.

Looking at our cash flow, we began the quarter with a cash balance of $126 million. During the quarter, operations generated $231 million in EBITDA. Debt repayment and cash interest totaled $20 million, and $103 million was distributed to shareholders through a cash dividend. In addition, we invested $7.2 million in vessels, $1.3 million in vessels under construction, and we also prepaid $56 million in long-term debt. Changes in working capital and other items amounted to $7.3 million, and the quarter ended with $161.7 million in cash. With that, I will turn the call over to Svein to go through the quarterly highlights.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: Thank you, Laila. I will now walk through our key quarterly highlights. Strong market conditions were driven not only by fundamental supply and demand dynamics, but also by ongoing market consolidation and regional disruptions, most notably stemming from the conflict involving Iran, which drove a significant expansion of global ton-miles. Crucially, DHT’s operational framework prioritizes the safety of our crew, cargo, and vessels above all else. In line with this policy, our fleet did not trade in the Persian Gulf during this period. Our teams delivered solid results through operational excellence without having to pursue trades to chase premium rates in the high-risk conflict areas. We capitalized on strong term demand by securing two additional time charter contracts during the quarter for two of our older ships.

Both the DHT Sundarbans, built 2012, and DHT Amazon, built 2011, entered into one-year contracts at an average rate of $109,000 per day. Looking to our long-term fleet development, we contracted a new build VLCC at Hanwha Ocean for early delivery in August 28th. She will be named DHT Oryx and will be a sister ship to the DHT Antelope and DHT Addax, both delivered from Hanwha Ocean earlier this year. The DHT Oryx will feature large carrying capacity and will come equipped with an exhaust gas cleaning system. We secured a new $250 million reducing revolving credit facility. All the banks in our banking universe participated, and it’s fair to add that it was meaningfully oversubscribed. The facility has a seven-year tenure, a 20-year repayment profile, and is priced at 135 basis points above SOFR. Additionally, it has an uncommitted accordion feature of $250 million.

Moving to events subsequent to the quarter. First, we secured a three-year time charter at $75,000 per day with a global energy company for the 2015-built DHT Jaguar, which is scheduled to deliver into the contract this September. Second, in line with our strategy to divest all the tonnage, we finalized the sale of the 2007-built DHT Bauhinia, delivering her to the new owner in July. This transaction generated $51 million in total cash proceeds and a net capital gain of $34 million. Lastly, in July, we took delivery of the DHT Impala from Hyundai. This represents the fourth and final new building in our 2026 fleet program. Referring to our prior disclosures, the vessel was successfully delivered with the intended design upgrades completed. Back to you, Laila.

Laila Halvorsen, Chief Financial Officer (CFO), DHT Holdings Inc.: Thank you. In line with our cash allocation policy of paying out 100% of ordinary net income at quarterly cash dividends, the board has approved a dividend of $1.22 per share for the second quarter of 2026. This marks our 66th consecutive quarterly cash dividend. The shares will trade ex-dividend on August 17th, and the dividend will be paid on August 24th to shareholders of record as of August 17th. Here we also present our estimated P&L and cash breakeven levels for the second half of 2026. Our P&L breakeven for the period is estimated at $29,700 per day, while our cash breakeven is estimated at $22,600 per day, which reflects all true cash costs. The difference between our P&L and cash breakeven is now estimated at $7,100 per day. This discretionary cash flow will remain within the company and be allocated for general corporate purposes.

On this slide, we present an update on bookings to date for the third quarter of 2026. We expect 1,020 time charter days covered for the third quarter at an average rate of $75,900 per day. This rate includes profit sharing for the month of July and the base rate only for the months of August and September for contracts with a profit-sharing feature. We also anticipate 1,029 spot days for the quarter, of which 58% or 600 days have been booked at an average rate of $152,700 per day. The spot P&L breakeven for the quarter is estimated to be less than zero, as the time charter earnings are expected to exceed forecasted costs. Turning to our 2026 dry dock schedule. As shown on this slide, we have seven vessels due for dry docking during the year.

DHT Lion completed its dry dock in the first quarter, while DHT Amazon, DHT Osprey, and DHT Puma completed their dry docks in the second quarter. DHT Panther completed its dry dock earlier this week, all planned dry docks were completed on time and within our expectations. Looking at the remainder of the program, two vessels, DHT Harrier and DHT Redwood, are scheduled to undergo their second and third special survey and dry docks respectively during the second half of 2026. Upon completion of these surveys, we will have completed this year’s dry dock program and enter 2027 with only four vessels scheduled for dry dock during next year, providing a rather light maintenance schedule from an operational and commercial perspective. Now I’ll turn the call back to Svein.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: Thanks, Laila. We will now turn to current market dynamics, where several structural forces are shaping the tanker landscape. Geopolitical friction and risk premiums. Middle East hostilities continue to force vessel rerouting, expanding ton-mile demand, and squeezing overall fleet efficiency. While most operators, including DHT, avoid high-risk zones, operators willing to venture into the Persian Gulf are extracting substantial risk premiums. Structural supply consolidation. Spot supply remains tightly constrained following major fleet consolidation by a private aggregator earlier this year, which has reduced fragmented spot capacity. Asset price floor. Second-hand asset values continue to see strong institutional support underpinned by acquisitions by a Middle Eastern national energy company at premium valuations. In China’s shock absorber strategy, China temporarily blunted global oil price spikes by drawing on its strategic and commercial crude stockpiles while curbing refined product export quotas.

Once this destocking cycle runs its course, we expect a sharp rebound in China’s seaborne crude import demand. Looking ahead, we see two primary structural catalysts driving market fundamentals. First, resolution versus continuation of regional conflict. If resolved, an operational mechanism for conflict resolution should normalize Iranian crude flows into compliant trade channels. This would shift transport volumes away from the non-compliant shadow fleet to independent compliant operators like DHT, substantially expanding our addressable markets. If unresolved, long-haul crude routes will persist. While the shadow fleet may continue trading, its need for vessel replacements will support second-hand asset values and ultimately force the retirement of the fleet’s oldest tonnage. Secondly, energy security and strategic reserve replenishment. Heightened global focus on energy security will necessitate a massive rebuilding of depleted national strategic and commercial inventories. This replenishment cycle will generate sustained transportation demand well beyond baseline daily crude consumption.

To wrap up, our operational strategy focuses on creating healthy risk-adjusted shareholder value across the market cycles. Securing higher margin fixed cash flow. We continue to lock in highly profitable revenue streams of fixed income across various tenors, backing up our forward cash generation and dividend capacity. Balanced market exposure. We maintain a deliberate balance, retaining significant spot market upside to capture rate spikes while layering on selective charter coverage to create cash flow and dividend visibility. Disciplined capital allocation. Our commitment to returning value remains absolute. We continue to operate under a capital allocation framework designed to translate market tailwinds directly into shareholder returns via quarterly cash dividends. Thank you for your time today. Operator, we are now ready to open the floor for questions.

Conference Call Operator: Thank you. To ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. We will now go to the first question. One moment, please. Your first question today comes from the line of Omar Nokta from Clarksons. Please go ahead.

Omar Nokta, Analyst, Clarksons: Thank you. Hi, Svein. Hi, Laila. Thank you for the update. Maybe just first on, Svein, you mentioned avoiding the Persian Gulf, given the high-risk area there. I wanted to ask about the situation in the Red Sea and how that’s maybe affected what you’re doing in that region. If I recall, you’ve been busy and others have been busy taking some of that Saudi crude from Yanbu, taking it to Asia. Obviously there’s been a step up in hostilities or at least the threat of it. What’s happened there? Has that affected how you’re trading your VLCCs in the region? I guess how do you think about those Yanbu volumes moving going forward?

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: At the get-go, we did several Yanbu loadings, both entering the Red Sea but also exiting through the Bab Strait. That has become a bit more challenging as of late following the threats from the Houthis. The result of that is that our ships have then typically exited the Red Sea through the Suez Canal. Then rerouted, of course, then adding significant transportation distances to the transportation work being conducted. That is, I think it’s fair to say most of the VLCC loadings, not just ours, have been directed northwest bound.

Omar Nokta, Analyst, Clarksons: Okay. Thank you. Do you think that that is a direct lifting from Yanbu and then offloading partially ahead of the Suez Canal, or are you starting to load directly out of the Med and that’s become a new trade pattern?

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: It’s both. We have ships loading at Yanbu. You need to offload about half of the cargo in order for the VLCC to transit the canal, and then you reload on the other end. There are also some ships, not ours, or under our sort of commercial control that are shuttling between Yanbu and Ain Sukhna. One of our time charter contracts is involved in that business. There’s also been some fixtures now, with ships coming from the Atlantic basin mostly, then loading directly at Sid, Suez in the Med, in Egypt, and then taking cargoes either to Europe or out to the Far East. There’s a mix of things. All of this again is just creating disruption, reducing the efficiency of the fleet, and thereby making the general markets much tighter.

Omar Nokta, Analyst, Clarksons: Yeah. Definitely. All right. Thank you. Maybe just a second question, a bit more big picture on DHT specifically. You took the final of the four new buildings due this year. You have the one that you recently ordered that’s coming in 2028. The fleet now stands at 23 going to 24. Vibe, you had mentioned a couple of months back at looking to expand DHT’s footprint. Is that still the aim, and going beyond sort of the 24 vessels that are spoken for? How would you go about doing so? Secondhand market, obviously, values are high. Is it more new buildings? Thank you.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: Yeah. No, it’s our general ambition to continue to build out DHT. As you rightly point out, secondhand values right now are in a territory making it challenging to, I think, invest for us. Patience here is key. There could, of course, be some corporate opportunities in due course, and which we will look at. We’ve done a couple of those historically, one in 2014 and one in 2017. It’s not easy, right? Rest assured that our eyes are on continuing to build out the company. It has to be at the valuations and the sort of financial conditions that ensures that there is also profitable growth for the company, not just buying assets for the sake of buying assets.

Omar Nokta, Analyst, Clarksons: Yeah. Thank you, Vibe.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: Thank you for your question.

Conference Call Operator: Thank you. We will now go to our next question, the question comes from the line of Gregory Lewis from BTIG. Please go ahead.

Gregory Lewis, Analyst, BTIG: Yeah. Hey, thank you and good afternoon, and thanks for taking my question. Lars, I’m just realizing it’s definitely a fluid situation, but I guess earlier this week there was talk of European minesweepers potentially entering, going into the strait to kind of get things more in a position. Realizing there’s not a real answer, but if you’ve thought about how you think this could proceed in the event that there is some sort of agreement, and the minesweepers are there to kind of clean out who knows what’s in there. How long after that do you think things could actually return to normal? What I mean by that is companies like DHT and other companies that have certain requirement standards, limitations on what they’re willing and not willing to do, really, you need a real open canal. We’re here in August.

What do you think is a blue sky opportunistic time where things might actually return to normal?

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: The simple answer, I don’t know.

Gregory Lewis, Analyst, BTIG: Understood.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: That’s just how it is, right? As you rightly point out, the news flows is both volatile and fluid, it’s very hard to sort of make decisions on it, because you might have some statements on a Wednesday, you are going to fix the ship that might sort of enter the area in 10 days, two weeks, three weeks, right? Then things can change in that period. It’s very hard to make sort of credible plans. I think in general terms, we would like to see the prospective opening of the straits to be credible, meaning that we see numerous transits and it’s all safely done. It’s not sort of selectively trying to attack certain ships over other ships, or certain nationalities over other nationalities, or certain cargoes over other cargoes, things like that.

We will unlikely be the first mover into this operation. We are of course keen for this market to return to sort of more normality, right? Let’s hope for this to happen in not too long.

Gregory Lewis, Analyst, BTIG: Okay. Great. Realizing the DHT Oryx is getting delivered in 2028, I think you kind of were talking about this with Omar. As we think about fleet positioning and the time it takes to get a string of new orders, at this point, if we’re in August 2026, barring resales, when could we actually see the turnaround time between placing a vessel order and actually taking delivery of a vessel, a string of newbuild VLCCs?

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: It depends a bit on which country and which shipyard you want to order at. Typically, we have been loyal to Hyundai and Hanwha Ocean in Korea, the sort of opportunities at those two shipyards are for 2030 delivery. There is a sort of revival of an earlier closed shipyard in Korea that is offering a bit earlier delivery. I guess at the shipyard, they will have to demonstrate or make clients comfortable with how that revival of that shipyard is being made. I think that the top-end shipyards in China that has the most experience, that’s also 2030 delivery. Whereas you’ve seen this last few months, you’ve seen a number of orders at shipyards with sort of no prior experience in building tankers, but maybe with great experience in building other types of equipment that has been able to offer earlier deliveries.

I would say today, if you’re willing to venture into the latter category, that’s probably a 2029 window, whereby sort of the more established high-end shipyards in Korea and Japan is 2030.

Gregory Lewis, Analyst, BTIG: Okay. Just one more for me real quick. I guess, around 25% of the fleet rolls off contract in early 2027, I think in Q1 or maybe early Q2. Do any of those vessels, I think there’s five to six of them, do any of those have customer options that could see those extended longer?

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: No, there’s limited options left in our sort of time charter fleet now. All these five one-year contracts that we did in the first half is only for one year, no optional periods. We have a couple of legacy charters that the firm periods will expire end of next year, if my recollection is correct, and they have some optional periods. The three-year charter we just announced has no optional period. The long-term charter we announced in March has sort of a wider window, if you like. That’s a very long-term charter, so it’s nothing to think too much about for next year. As of now, our cover for next year is about one quarter of the fleet is on fixed income, of which one has a profit sharing, right, for the full year. The last one with profit sharing will redeliver in the first quarter.

We’re down to below 20% coverage for 2028. This is going to be a little bit of an evolving portfolio. We have some customers that are interested in developing more business with us. We’ll just take our time, and we’ll be patient about it.

Gregory Lewis, Analyst, BTIG: Okay. Super helpful. Thank you very much.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: Thank you.

Conference Call Operator: Thank you. As a reminder, if you would like to ask a question, please press star one and one on your telephone. That is star one and one if you would like to ask a question. We will now go to our next question. Our next question today comes from the line of Erik Halvorsen from Pareto Securities. Please go ahead.

Erik Halvorsen, Analyst, Pareto Securities: Yeah. Hi, Svein. Just to talk a little bit more about those time charters, because five of those vessels are obviously your five oldest ones, the Nomikos. I guess given your track record, it must be tempting to kind of fight to at least exploit current asset values and try to sell them. Would you do that without any kind of replacement? I guess my question is, fleet size-wise would you sell those 15-year-olds without any kind of new builds in the pipeline?

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: No. We are sort of focused on maintaining earning capabilities or capacity, right, with the fleet. In a sort of a scenario that we would like is not to dispose of those ships without having a clear path for sort of renewals and hopefully also expansion as a net result. That being said, these values, as you say, are very high now, but these five ships are also in very, very good condition and can service the industry easily for the remaining five, six years, if not longer, if need be. It’s not an easy path to execute on all that, but that’s how we think about it. Ideally, we would like to have a replacement plan. That can be a combination of things, but if we decide at some point to divest them. As of now, there’s no divestment plans for those assets.

Erik Halvorsen, Analyst, Pareto Securities: It will be kind of a decision when you get there, whether to charter them out or, of course, you can trade them.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: Yes.

Erik Halvorsen, Analyst, Pareto Securities: I mean, we saw today also announced a charter with start up 3 months into the future. Is that market that only liquidity is something you can do now, charter out that source with start up, I mean, almost into 2027?

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: I think the way it works is that you can create that liquidity with the pricing the forward delivery at a discount to relatively prompt delivery. How deep the liquidity is maybe is not so active because most people that want a one-year charter, they want to have a pretty clear idea what the first cargo or sort of the kickoff for the charter is going to be and how much profit they’re going to make on that. That’s the common path. I would say today that the one-year charter for a modern ship is probably 120, 125 in maybe in that range. Forward delivery, I think on this reported fixture was just sub 110, if my recollection is correct.

That’s sort of probably what has been put on the table to entice that forward delivery, I would assume, although I don’t have the insights of the negotiations of that charter.

Erik Halvorsen, Analyst, Pareto Securities: Okay. Thank you, Svein.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: Thank you.

Conference Call Operator: Thank you. We currently have no further questions. I will now hand the call back to Svein for closing remarks.

Svein Moxnes Harfjeld, President and Chief Executive Officer (CEO), DHT Holdings Inc.: Thank you very much for everyone tuning into DHT. Much appreciated and wishing you all a good day ahead.

Conference Call Operator: Thank you. This concludes today’s conference call. Thanks for participating. You may now disconnect.