Good day and thank you for standing by. Welcome to the Q1 2025 DHT Holdings, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Laila Halvorsen, CFO. Please go ahead.

Thank you. Good morning, and good afternoon, everyone. Welcome and thank you for joining DHT Holdings first quarter 2025 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 May 14. 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 reports 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. We are pleased to report on another quarter with a respectable performance for DHT. In the first quarter of 2025, we achieved revenues on a TCE basis of $79.3 million and adjusted EBITDA of $56.4 million. Net income came in at $44.1 million, equal to $0.27 per share. After adjusting for the $19.8 million gain on sale of vessel related to the sale of DHT Scandinavia, the company had a net profit for the quarter of $24.3 million, equal to $0.15 per share. Vessel operating expenses for the quarter were $17.8 million and G&A for the quarter was $5.5 million. For the first quarter, the average TCE for the vessels in the spot market was $36,300 per day. The vessels on time charters made $42,700 per day, while the average combined TCE achieved for the quarter was $38,200 per day. DHT has a robust balance sheet with low leverage and significant liquidity. We have continued to strengthen our balance sheet, and the first quarter ended with total liquidity of $277 million, consisting of $80.5 million in cash and $196.2 million available under our two revolving credit facilities. At quarter end, financial leverage was 16.9% based on market values for the ships and net debt was $12.3 million per vessel, well below estimated residual ship values. On this slide, we present the cash flow highlights for the quarter. We started the quarter with $78 million in cash and we generated $56 million in EBITDA. Ordinary debt repayments and cash interest amounted to $19 million and $27 million was allocated to shareholders through a cash dividend. $25.8 million was used for our new building program, $42.5 million was net proceeds from the sale of DHT Scandinavia, while $32.4 million was prepaid under one of our revolving credit facilities and can be reborrowed in the future. Positive changes in working capital and other amounted to $8.4 million and the quarter ended with $18.5 million in cash. With that, I will turn the call over to Svein.

Thank you, Laila. We will here take you through some quarterly highlights. We sold our ownership of the DHT Scandinavia built in 2006 for $43.4 million. She was delivered in January, and we recorded a capital gain of $19.8 million during the quarter. She was debt-free and her proceeds will be allocated to general corporate purposes under investments in vessels and/or share buybacks and/or prepayment of debt. We entered into two time charter contracts. Firstly, the DHT China built in 2007, one of our oldest ships, was fixed to a leading commodity trader for one year at $40,000 per day. The contract commenced in January. Secondly, we fixed the DHT Tiger built in 2017 to one of our largest customers, an oil major, for a year at $52,500 per day. This contract commenced at the end of March. On this slide, we will discuss capital allocation and dividends. As per our capital allocation policy of paying out 100% of ordinary net income as quarterly cash dividends, the dividend for the first quarter of 2025 is declared at $0.15 per share. This marks our 61st consecutive quarterly cash dividend. The shares will trade ex-dividend on May 21, and the dividend will be paid on May 28. In the graph to the left, we share our P&L and cash breakeven levels for 2025. The difference between the two is estimated at $7,200 per day for the year. This discretionary cash flow will remain in the company and be allocated to general corporate purposes, with the intention being to fund installments under our new building program. The graph on the right illustrates the accumulated dividends since updating our capital allocation policy from the third quarter of 2022. The accumulated amount of dividend is $2.51 per share and reflects well during a period in which our share price has appreciated and we made share buybacks totaling $32 million, equal to 2.3% of the company, in addition to the quarterly cash dividends. Here, we update you on the bookings to date for the second quarter of 2025. We expect to have 780 time charter days covered for the second quarter at $42,200 per day, an improvement when compared to the prior quarter. This rate assumes profit sharing for the month of April and the base rate only for May and June for the time charter contracts that have a profit-sharing feature. Given the current spot market, there is potential for additional profit-sharing and upside to the time charter earnings for the two vessels once the quarter is done. We assume 1,245 spot days in the quarter, of which 72% have been booked at an average rate of $48,700 per day, a meaningful improvement when compared to the first quarter. The current market is strong, and we are constructive on the way forward. The spot P&L breakeven for the second quarter is estimated to be $17,500 per day, a number you may use to estimate the net income contribution from our spot fleet for that quarter. We will now discuss updates to our fleet. As earlier announced and subsequently to the first quarter, we entered into a truly long-term time charter and an agreement to sell two older ships. The DHT Appaloosa built in 2018 has entered into a seven-year time charter with a global energy company, also commonly referred to as an oil major. The contract has a fixed base rate of $41,000 per day plus an index-based profit-sharing structure calculated on the vessel's specifications. The vessel in question is an excellent ship and is expected to provide competitive earnings under the pre-agreed calculator for profit sharing, and the index earnings in excess of $41,000 per day will be shared equally between the customer and DHT. We really like the deal, and it offers long-term visibility on base earnings, thereby protecting the downside while retaining upside to the market. We agreed to sell the DHT Lotus and DHT Peony for a combined price of $103 million. The vessels were built at Bohai Shipbuilding in 2011 and came into DHT through the BW fleet acquisition in 2017. The vessels were acquired for a combined price of $115.8 million and have served us well during these eight years. The DHT Lotus was delivered to our new owners during April, and we expect to record a gain of $17.5 million in the second quarter. The DHT Peony is expected to deliver during July, and we project to record a gain of $15.5 million in the third quarter. The proceeds from the sales will be allocated to general corporate purposes under investment in vessels and/or share buybacks and/or prepayment of debt. Here is our fleet employment overview. As per usual, we have a mix of spot and term charter contracts in our portfolio. There are currently a total of nine ships on time charter, of which three are coming off during this year, namely DHT Europe, DHT Lion, and DHT Harrier. The DHT Puma and the DHT Appaloosa, in green color, have profit-sharing features built into the contract, offering a combination of a certain level of earnings visibility without giving away all the upside in strong markets. We have meaningful exposure to this rising freight market both in the spot market and with potential rerating on new time charter contracts. Further, we will, as you probably know, expand our fleet with four new and very competitive ships in the first half of 2026. These ships have gained a total of close to 800 additional earnings days in 2026 compared to when the contracts were entered into. Here we provide an update on a corporate transaction subsequent to the quarter; we have acquired the remaining outstanding shares in Goodwood Ship Management for a purchase price of $6.1 million. As a result, DHT now owns 100% of the company. This company is a very important pillar in DHT's business and strategy, undertaking the technical management of our ships, including recruitment, employment, and training of our seafarers. The company is now fully integrated into DHT, and we will continue to develop and build on its excellent safety and operational track record in support of our long-term strategy. Now an update on our debt financing. We have entered into a $30 million secured reducing revolving facility with Nordea, being one of our relationship banks. The new loan will refinance the current facility for the DHT Jaguar with its current outstanding debt of $25.5 million. The new loan is priced at 175 basis points, a bonus offer and is a DHT-style financing, including a six-year tenure and a 20-year repayment profile. We reiterate our views that the dynamics of our market are increasingly becoming a favorable supply story with a rapidly aging fleet exceeding a benign order book for new ships and a string of sanctions making it increasingly challenging to trade ships in the charter fleet. The graph updates the demographics of the VLCC fleet. Apologies for being repetitive, but we think it's important to reinforce the obvious, which is that the VLCC fleet is set to shrink at a time when demand for our services is growing. By the end of 2026, we estimate 441 VLCCs to be older than 15 years of age and 199 to be older than 20. Extraordinarily, we estimate 58 to become older than 25 years. All these numbers assume no scrapping, staggering numbers that support our markets and business. The order book for new VLCCs is benign, with about 11% of capacity on order. There will be five ships delivered for the remainder of 2025; 28 are scheduled for 2026, 48 in 2027, and 19 in 2028. Of the order book, about 20% are being constructed and built in Korea. OPEC has started to bring more of its oil to the markets, contributing to strengthening freight rates evidenced through new highs for the year and higher lows. We believe OPEC's decision is supported by the following: one, continued oil demand growth; two, a temporarily moderating growth trajectory of Atlantic-based oil production, offering an opportunity for OPEC and Saudi Arabia in particular to regain some market share; low crude oil event inventories in China requiring refilling to support growth and new refining capacity coming on stream; and lastly, certain sanctioned oil production being at risk with a possible need for replacement. Our markets have for the past two-and-a-half years or so fared better than what most people think. In fact, DHT's average spot market earnings for this period were just shy of $50,000 per day, $49,300 per day to be precise. We think this is a very handsome number. With a favorable supply backdrop and the constructive oil market for freight, we believe it's reasonable to expect rewarding times ahead or in plain English, we are bullish. We continue to focus on what we can control and delivering on what we believe is a resilient business approach and strategy. We receive encouragement from our key stakeholders, namely shareholders, customers, and lending banks. Irrespective of which constituency you belong to, you should expect us to focus on solid customer relations with safe and reliable services, a competitive cost structure with robust breakeven levels, a solid balance sheet, and a clear capital allocation policy to create long-term shareholder value. We appreciate the encouragement. We will stick to our knitting, work hard, and operate with leading governance standards and a high level of integrity. And with that, we open up for Q&A. Over to you, operator.

Thank you. Our first question comes from Frode Mørkedal from Clarkson Securities. Please go ahead. Your line is open.

Thank you. Hi, Svein and Laila. First off, I guess on the vessel sales, sold it to only Chinese big ships. I guess that's not a coincidence, right? So maybe you can talk firstly about the decision to do that. And yes, how you're thinking about that Korean versus Chinese built ships. That's the first question. And related to that, I guess, you have a lot of cash coming in, $85 million after debt. And then you list the general corporate purposes and investments first share buy, second and prepayment of debt. Is that coincidence or is that actually the priority as we see it now?

So on the first, we felt it was an opportune time now to sort of fine-tune our fleet profile. This reflects discussions with customers about what they would like to see from DHT and how they would like to see us positioned going forward. These two ships, as you say, have been with us for eight years. We bought them for only about $10 million to $12 million above what we sold them for now. So it's been a very, very good investment. So in a way, it's also a good opportunity to take some profit off the table. So that's really with that. On the chronology of the three items, apart from cash dividends, that is in no specific order. It depends on the time, the opportunities we can find in the market, and so forth. It is, of course, in general our priority to invest in ships as opposed to invest in buying our own stock or investing further in the balance sheet, which is already super strong. But it's not so easy to find opportunities. We are in this market all the time. If we can identify good investments, we have ample firepower to do that and can do so without seeking additional capital in the company. Time will tell what we can actually deliver on. If you look at our historical buybacks, you will note that they occur at times when we feel there is a meaningful dislocation in the capital market when compared to asset values and the trajectory of the underlying business. So, at the current market, this is not an area where you should expect us to apply capital.

Okay. That's understood. Thank you.

Thank you. We'll now move on to our next question. Our next question comes from the line of Jon Chappell from Evercore ISI. Please go ahead. Your line is open.

Thank you. Good afternoon. So in the Appaloosa contract, it really stands out given its duration. But also the structure base rate is higher than one of the one-year time charters you just did. Is this a complete one-off or are you seeing more appetite for extended contracts and more appetite for profit share contracts, which seems to be the structure of the past as opposed to the present times?

So we are very excited about this contract. We think it's well balanced, and it's an excellent counterparty as a meaningful customer of ours, where we have the ambition to expand the relationship, if I can use that word. These contracts are far and few between, and I do think it reflects a couple of things. One is that the customers are aligned with our view that the VLCC fleet is going into a period where it will be hard to find really good assets from top operators like DHT. They are concerned about securing quality tonnage from a quality operator. I should not speak for them, but this is our impression. The fact that you mention this alludes to the fact that we can do a base rate, which is quite healthy with the profit sharing. It's also a reflection of the quality of this ship and the sort of commercial features, consumption, and size. All in all, it made good sense for the counterparty. If at all possible, to develop more of these, we will entertain that, but it's not readily available; it requires a lot of work. It took several months to finalize this. So let's see. But in general, DHT is open to similar structures or contracts if we can develop them.

Okay, that makes sense. Second one more market-related, there's been a lot of optimism about OPEC's seeming shift in strategy. You mentioned it in your prepared remarks as well. Sometimes when OPEC announces an increase in production, it's not really on a one-for-one basis, just given there's some overproduction or certain members can't produce to their quota. Based on what they've announced so far, do you have a rough estimate of how much of that do you think will actually enter the market? The timing as such and the equivalent amount of VLCCs that could be added from the last two meetings from OPEC?

I wish I could give you a precise answer, but it's a bit too early to tell. I think at the get-go when the additional barrels came to the market, the amounts were quite modest, and we believe that this was probably spread across existing shipments, lifting a little bit more cargo on each keel rather than having an additional number of ships loading. At first, it wasn't very visible. Now that the amounts are coming into the 400,000 sort of barrel plus, it's a very different scenario, and we think that from June onwards, we will see this more clearly in the market. There is, of course, some balancing against other OPEC members that have possibly overproduced. But I think only the insiders of OPEC, and maybe Saudi Arabia in particular, truly know this. We try to make sense of it, but what we observe is that there have been more cargo in the market; exactly how many we will have to look back one month after month to tally.

Okay. Thank you, Svein.

Thank you. We'll now move on to our next question. Our next question comes from the line of Greg Lewis from BTIG, LLC. Please go ahead. Your line is open.

Yes. Thank you, and good afternoon, and thanks for taking my questions. I guess, I was kind of curious. It's not really been impacting the crude market, but at least in the containership market, we're starting to hear about vessel sailing cancellations and I'm just curious; as we think about fuel spreads as maybe not in tankers, but in some of these other sectors starting to see pullbacks in demand. Any kind of view on what that could do to fuel spreads.

When you say fuel spread, you mean between very low sulfur and heavy?

Yes, exactly, the scrubber spread.

Yes. As of late, it's been hovering between call it 50 and 100; it's been down below 50 at certain times as well. So the spread is thinner compared to when all the scrubber projects were coming on a few years ago. I think this is also related to whether people are buying heavy or fuel oil as the feedstock as opposed to crude oil. It also reflects what the refiners are tuning their stack to deliver. I'm not a refining expert, but I sense that if there's more demand for jet or higher grades, that tends to widen the spread a bit. And when that's not the case, we've had more diesel demand than what people expected lately, so that may have compressed part of this. It’s a mix of factors without a very precise number.

Okay. Great. And my other one is a little macro too. It's interesting as you look at the oil curve for Brent; it has been backwardated for a long time. About 30 days ago, it started to move into contango, not in 2026, but like in 2028. Now, in the last week, you've seen oil in contango like a year out. Just as you think about what that can do to the tanker market, realizing it's only been a couple of weeks since this has happened; any thoughts on if we continue to see this contango curve hold? How that could impact demand for VLCCs, speed of vessels, maybe storage. I'm just curious about your views on that given its quick change.

I think typically, if the contango widens or increases, it could drive some floating storage, but it's just too narrow, and there's no room for that activity to happen right now. However, if that trend becomes stronger and wider, you will see more activity of people storing oil. But I shouldn't forecast that for a particular timeframe; that's a typical result.

Okay. Thank you.

Thank you.

Thank you. We'll now move on to our next question. Our next question comes from the line of Omar Nokta from Jefferies. Please go ahead. Your line is open.

Thank you. Hi Svein, good afternoon. A couple of kind of bigger picture questions also just more on the macro or perhaps just the market on VLCCs. Obviously, OPEC bringing back volumes and to what extent remains to be seen, as you mentioned. You also talked a bit about the potential for these OPEC barrels coming to market perhaps because the Atlantic Basin has been a bit of a void. Just wanted to ask as you think about the market move here over the next several months, especially into the seasonally softer summer period, do you think the OPEC volumes coming in are strong enough to push this market higher and offset the potential Atlantic Basin decline?

Yes. Based on the plan, we read in the cards, we think that could be the case, and we may potentially have a quite robust summer market, which is not typical for this season. When I talk about the Atlantic, it's of course mainly U.S. shale that is still growing, but at a much smaller level. You're probably going to see steps because Brazil and Guyana are growing, and you have quite a lot of new oil coming off the West Coast of Canada, much of which is going to the East and Far East. So, there is still some non-OPEC growth, but it's at a slower speed compared to the U.S. now for several years. This creates an additional argument for OPEC to say this is an opportunity for us to recoup some market share. I guess the Saudis, in particular, have invested in several large and modern refineries in the Far East, so I think ensuring they can deliver feedstock to these is also in their interest, rather than competing with other suppliers.

Yes. Yes. Thanks, Svein. And I guess part of the bullish thesis for VLCC this year has been the sanctioning of so many shifts and the tightening of that capacity, especially as it's been primarily due to moving Iranian barrels. How do you think this market shakes out? For instance, if the U.S. and Iran reach a long-term agreement and Iran's volumes are perhaps welcomed back into the open market, how do you think that VLCC market reacts to that?

Yes. I think this is a good question. We have two broad scenarios: one, there is an agreement with Iran and the U.S., and sanctions are lifted, allowing Iran to access the compliant market for freight, which is cheaper per barrel to transport than in the shadow or the sanctioned market. Those barrels will move quite quickly to the compliant fleet, as we've seen in previous periods when sanctions have been lifted; it's only positive for these. If the opposite happens, and there's maximum pressure on Iran, and their production is driven to the floor, someone else will have to step in to supply, likely other Middle Eastern producers, especially Saudi and UAE. So I do think both scenarios are actually positive for the VLCC business. Furthermore, related sanctions mean that Russian oil is sold below the price cap, allowing access to the market, but that primarily affects Aframaxes and Suezmaxes, so it has a limited impact compared to the Iranian story.

Okay. That's very clear. Thank you, Svein.

Thank you. There are no further questions at this time. So I'll hand the call back to Svein for closing remarks.

Thank you very much to all for listening in and following DHT; it is much appreciated, and I wish you all a good day ahead.

This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.