company presentation by svein moxnes harfjeld, president & ceo · company presentation june 20,...

Company Presentation

June 20, 2016

http://www.shipfinance.dk/en

Disclaimer

This presentation contains certain forward-looking statements and information relating to the Company that are based on beliefs of the Company's management as well as assumptions, expectations, projections, intentions and beliefs about future events, in particular regarding dividends (including our dividend plans, timing and the amount and growth of any dividends), daily charter rates, vessel utilization, the future number of newbuilding deliveries, oil prices and seasonal fluctuations in vessel supply and demand. When used in this document, words such as "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "will," "may," "should" and "expect" and similar expressions are intended to identify forward-looking statements but are not the exclusive means of identifying such statements. These statements reflect the Company's current views with respect to future events and are based on assumptions and subject to risks and uncertainties. Given these uncertainties, you should not place undue reliance on these forward-looking statements. These forward-looking statements represent the Company's estimates and assumptions only as of the date of this presentation and are not intended to give any assurance as to future results. For a detailed discussion of the risk factors that might cause future results to differ, please refer to the Company's Annual Report on Form 20-F, filed with the Securities and Exchange Commission on March 19, 2015.

The Company undertakes no obligation to publicly update or revise any forward-looking statements contained in this presentation, whether as a result of new information, future events or otherwise, except as required by law. In light of these risks, uncertainties and assumptions, the forward-looking events discussed in this presentation might not occur, and the Company's actual results could differ materially from those anticipated in these forward-looking statements.

June 20, 2016

Forward Looking Statements

2

DHT in a nutshell

June 20, 2016 3

Dedicated crude oil tanker company

• 20 ships in the water: 17 VLCCs and 2 Aframaxes

• 3 VLCC newbuildings for delivery in 2016

• Average age of 7.2 years (including newbuildings)

• Fully integrated shipowning company

• 16 shore-side employees

• Registered in the Marshall Islands

DHT strives for excellence across the board:

• Quality ships built at quality yards

• Technical management and seafarers

• On-shore organization

• Vigilant operations

• Customer service

• Robust and prudent capital structure

Publicly listed in New York

Listed on New York Stock Exchange under ticker DHT

Market Cap: ≈$500m

3-month average daily trading volume: 2.2m shares

Quarterly cash dividends

Open shareholder structure

June 20, 2016 4 Source: NYSE

Fully funded embedded growth

5

18% increase in VLCC fleet

over the next 4 months

June 20, 2016

17

20

0

5

10

15

20

25

Existing VLCCfleet

DHT Panther DHT Puma DHT Tiger Fully deliveredfleet

# o

f V

LCC

s

DHT VLCC fleet

Jul-16

Aug-16

Oct-16

Jul-16

Aug-16

Oct-16

Q1 Highlights

Took delivery of two newbuilds; • DHT Leopard (January 2016)

• DHT Lion (March 2016)

Entered into agreement to sell the 2001-built Suezmax DHT Target for $22.5m • Estimated delivery to buyers in May

Prepaid $46.9m of mortgage debt

Securities repurchase program • $4.0m of convertible senior note at 99%

of par Of which $1.0m in April

$2.0m of common stock (359,831 shares at an average price of $5.64 per share)

June 20, 2016 6

P&L Highlights

Q1 2016 USD Thousands, except per share amounts

Revenues on TC basis $ 90,249

Vessel operating expenses $ (14,288)

Impairment charge vessel held for sale $ (8,100)

G&A $ (6,470)

EBITDA $ 61,391

Net Income $ 31,531

EPS 0.34

June 20, 2016 7

Q1 2016 – Excluding Impairment USD Thousands, except per share amounts

Revenues on TC basis $ 90,249

Vessel operating expenses $ (14,288)

Impairment charge vessel held for sale $ -

G&A $ (6,470)

EBITDA $ 69,491

Net Income $ 39,631

EPS 0.43

DHT paid a cash dividend of $0.25 per share on May 25, 2016 to shareholders of record as of May 16, 2016.

• Dividend was based on 60% of Net Income excluding impairment of asset held for sale

VLCC Earnings 2015-2016 YTD

June 20, 2016 8

USD/day Q1’15 Q2’15 Q3’15 Q4’15 FY’15 Q1’16

Spot Earnings $ 60,400 $ 52,300 $ 59,600 $ 62,200 $ 58,600 $ 62,600

TC Earnings $ 35,500 $ 38,500 $ 38,800 $ 43,700 $ 39,100 $ 44,800

Total $ 50,300 $ 46,300 $ 50,700 $ 54,500 $ 50,400 $ 56,900

Profit sharing from time-charter not included in spot earnings for 2015. If it had been included, the average VLCC spot TCE for 2015 would have been $60,000/day.

Managing the cycles Counter cyclical investment philosophy

RECOVERY

PHASE

HIGH MARKET PHASE

TROUGH / INVESTMENT

PHASE

• Aggressive growth

• Spot

• Nominal dividends

• Selective growth

• Spot Term

• Increased dividends

• Delevering

• Divestment of older tonnage

• Time charters

• Formula based dividends

• Delevering

Sale & Purchase: Chartering: Capital allocation:

June 20, 2016 9

Executing on our strategy

Q3 2013

Q4 2013

Q1 2014

Q2 2014

Q3 2014

Q4 2014

Q1 2015

Q2 2015

Q3 2015

Q4 2015

Q1 2016 Q2 2016

S&P Acquired 16 VLCC’s Sold 2000-

built Suezmax Sold 2001-

built Suezmax

Chartering

Secured time

charters for 5 vessels

Extended and repriced time charter for 1

vessel

Extended and repriced time charters for 3

vessels

Secured time charter for 1

vessel

Extended and repriced time charter for 1

vessel

Capital allocation

Dividends $0.02 $0.02 $0.02 $0.02 $0.02 $0.05 $0.15 $0.15 $0.18 $0.21 $0.25

Debt prepayment

Prepaid $20.0m of bank debt



Securities repurchases

Repurchased $3.0m of CB. Repurchased

$2.0m of common stock

Repurchased $1.0m of CB

June 20, 2016 10

Updated Capital Allocation Policy DHT intends to return at least 60% of its ordinary net income (adjusted for extraordinary items) to shareholders as quarterly cash dividends. Further, DHT intends to allocate surplus cash flow, after paying such quarterly cash dividends, to delever its balance sheet, to repurchase its own securities, or for general corporate purposes. The extent and allocation will depend on market conditions and other corporate considerations. DHT will apply its updated capital allocation policy starting with the first quarter of 2016.

Fleet Employment

June 20, 2016 11

2016 2017 2018

Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4

DHT Phoenix VLCC

DHT Ann VLCC

DHT Chris VLCC

DHT Eagle VLCC

DHT Condor VLCC

DHT Falcon VLCC

Samco Scandinavia VLCC

DHT Hawk VLCC

Samco China VLCC

Samco Europe VLCC

DHT Amazon VLCC

Samco Redwood VLCC

Samco Sundarbans VLCC

Samco Taiga VLCC

DHT Jaguar VLCC

DHT Leopard VLCC

DHT Lion VLCC

DHT Panther VLCC

DHT Puma VLCC

DHT Tiger VLCC

DHT Sophie Aframax

DHT Cathy Aframax

% spot 58 % 60 % 63 % 68 % 80 % 82 % 86 % 92 % 95 % 95 % 95 %

% TC 42 % 40 % 37 % 32 % 20 % 18 % 14 % 8 % 5 % 5 % 5 %

Spot TC Index

Fixed Income

June 20, 2016 12

2016 2017

% of Days Fixed

Fixed Income Average TC

rate % of Days

Fixed Fixed Income

Average TC rate

VLCC 32% $ 89.1m $ 44,500 20% $ 59.1m $ 44,400

Suezmax 100% $ 3.1m $ 30,000

Aframax 100% $ 15.9m $ 22,500 29% $ 4.6m $ 22,500

Total 38% $ 108.1m 20% $ 63.7m

Fixed TC Fixed TC

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

Cash costs Cash break-even cost

Required ratesfor spot ships

Cash generationcapacity

USDm Estimated cash break-even H2 2016

Maintenance CAPEX

Cash G&A

Debt repayment

Interest

OPEX

V: $ 21,600

A: $ 13,000

V: $ 14,900

If VLCC spot: $ 30,000



Fixed TC Fixed TC

$-

$50

$100

$150

$200

$250

$300

$350

$400

$450

Cash costs Cash break-even cost

Required ratesfor spot ships

Cash generationcapacity

USDm Estimated cash break-even 2017

Maintenance CAPEX

Cash G&A

Debt repayment

Interest

OPEX

V: $ 22,600

A: $ 13,600

V: $ 18,200

A: $ 10,900




DHT Cash Break-Even

June 20, 2016 13 “Cash sweep” on the 4 RBS ships not included.

Estimated cash costs of approx. $173 million

If VLCC spot earnings: $60,000/day Estimated cash flow: $252m



Estimated cash costs of approx. $89 million




G&A

June 20, 2016 14

DHT 2017 cash G&A per ship per day ≈ $1,550 • Whereof commercial department cost ≈ $450 per ship per day

• Pool A: $700 per ship per day*

• Pool B: $770 per ship per day*

• Pool C: $1,100 per ship per day* *Based on DHT in-house research

DHT VLCC average spot earnings per day Q1’15-Q1’16 (+ Q2’16 Guidance) compared to peers;

$48 000

$50 000

$52 000

$54 000

$56 000

$58 000

$60 000

$62 000

DHT Peer 1 Peer 2 Peer 3

USD/day VLCC Spot Earnings

Short term volatility…

June 20, 2016 15 Source: Clarksons

$-

$20 000

$40 000

$60 000

$80 000

$100 000

$120 000

Q115 Q215 Q315 Q415 Q116 Q216

USD/day Clarksons VLCC Spot Earnings

…influencing DHT share price…


$4,0

$5,0

$6,0

$7,0

$8,0

$9,0

$10,0

$-

$20 000

$40 000

$60 000

$80 000

$100 000

$120 000

Q115 Q215 Q315 Q415 Q116 Q216

USD/share USD/day Clarksons VLCC Spot Earnings DHT Share Price

…whilst actual, quarterly spot earnings have been remarkably steady


$4,0

$5,0

$6,0

$7,0

$8,0

$9,0

$10,0

$-

$20 000

$40 000

$60 000

$80 000

$100 000

$120 000

Q115 Q215 Q315 Q415 Q116 Q216

USD/share USD/day Clarksons VLCC Spot Earnings DHT VLCC Spot Earnings DHT Share Price

DHT EPS vs. share price

June 20, 2016 18

* Adjusted EPS

$0,20

$0,25

$0,30

$0,35

$0,40

$0,45

$5,0

$5,5

$6,0

$6,5

$7,0

$7,5

$8,0

$8,5

$9,0

$9,5

Q115 Q215 Q315 Q415 Q116*

USD/share USD/share DHT Share Price (LHS) DHT EPS*

Key Customers

19 June 20, 2016

Key Lending Banks

20 June 20, 2016

Summary

DHT has become a significant shipowner in the large tanker market with 20 VLCCs and 2 Aframaxes

We strive to be among the best in class – both hardware and software

We don’t aim to be the biggest, but we shall strive to become one of the most respected tanker companies in the world

June 20, 2016 21

company presentation by svein moxnes harfjeld, president & ceo · company presentation june 20,...

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