DHT Holdings Orders Two VLCCs

Image Courtesy: DHT Holdings

Crude oil tanker company DHT Holdings placed an order for two very large crude carriers (VLCCs) with Korean shipbuilder Hyundai Heavy Industries earlier in January.

Featuring 319,000 dwt, the new VLCCs are expected to join the company’s fleet in July and September 2018.

DHT said that 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.

The announcement was made as part of the company’s financial earnings report in which DHT informed that its net income for the fourth quarter of 2016 stood at USD 17.8 million, compared to USD 32.4 million reported in the same quarter a year earlier.

Shipping revenues for the fourth quarter were at USD 84.9 million, down from USD 94.6 million seen in the same quarter of 2015, mainly due to lower tanker rates as well as off hire due to repair and design modification of the rudders for the VLCC newbuildings in the 2016 period.

Inclusive of the non-cash impairment charges of USD 84.7 million the company reported a net income of USD 9.3 million for 2016, compared to a net income of USD 105.3 million in 2015.

Shipping revenues for the year were at USD 356 million, compared to USD 365.1 million in 2015, mainly due to lower rates and scheduled drydockings in 2016 offset by more vessels in the fleet with the delivery of newbuildings.

On January 27, John Fredriksen-controlled tanker owner and operator Frontline started initial discussion with DHT for a potential business combination.

Frontline proposed the acquisition of all of the company’s outstanding shares of common stock in a stock-for-stock transaction at a ratio of 0.725 Frontline shares for each DHT share. The proposal is subject to usual and customary conditions for transactions of this nature.

DHT has a total fleet of 21 VLCCs, 19 in the water and two under construction, as well as two Aframaxes. Six of the VLCCs and the two Aframaxes are on fixed rate time charters.

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