Eirik Haavaldsen

Eirik Haavaldsen questioned DHT's balance sheet strategy, ideal debt level, and capital allocation given strong cash flows and low leverage. He also asked about the outlook for newbuild prices and DHT's interest in Chinese-built vessels, especially in light of the USTR issue and fleet modernization.

Answer

Svein Moxnes Harfjeld, President and CEO, explained that DHT aims to invest and grow organically, maintaining balance sheet capacity for future acquisitions without issuing new shares. He highlighted the importance of a meaningful delta between P&L and cash break-even for retained cash. Regarding newbuilds, Mr. Harfjeld stated no principled objection to Chinese shipyards but prefers certain ones, awaiting clarity on the USTR issue before making decisions. He noted current newbuild prices for 2029 delivery are around ±$130 million.

Eirik Haavaldsen questioned DHT's balance sheet strategy, specifically the ideal debt level, given strong cash flows and vessel sales are rapidly reducing leverage to levels below scrap value. He also asked about the trajectory of newbuild prices over the next year and DHT's interest in Chinese-built vessels, especially after divesting older Chinese-built ships, inquiring if they would now focus solely on Korean-built vessels.

Answer

Svein Moxnes Harfjeld (President and CEO, DHT Holdings Inc) clarified that debt-to-market value is in the teens, while debt-to-book is around 26.5%. He emphasized the importance of maintaining balance sheet capacity for organic growth and investments without issuing new shares, and retaining a meaningful delta between P&L and cash break-even for corporate purposes. He noted DHT has capacity to acquire a couple of modern ships without new capital. Regarding newbuilds, Mr. Harfjeld stated no principled objection to Chinese shipyards but prefers experienced ones. He awaits clarity on the USTR issue between the U.S. and China before making final decisions, acknowledging that 70% of the order book is in China. He estimated newbuild prices for Hanwha Ocean vessels delivering in H1 2029 to be around ±$130 million.

Eirik Haavaldsen, Head of Equity Research at Pareto, asked about CMB.TECH's strategy for disposing of older vessels, particularly tankers, to capitalize on elevated asset values, and whether the company plans to use time charters for modern vessels to de-risk cash flows. He also inquired about the decision to retain the 'Golden' prefix for the Panamax Kamsar fleet.

Answer

CEO Alexander Saverys confirmed that CMB.TECH is more inclined to sell older tonnage (over 15 years) at current high valuations, balancing short-term cash flow with asset realization. He also stated that while they seek to take time charter cover for modern vessels, current market offers haven't been tempting enough. The 'Golden' prefix is retained for Panamaxes to respect Golden Ocean's history.

Eirik Haavaldsen inquired about CMB.TECH's strategy for selling older vessels, particularly tankers, balancing elevated asset values with strong short-term cash flow, and whether the company plans to de-risk cash flows by locking in modern vessels with time charters. He also asked about the decision to retain the 'Golden' prefix for Panamax/Kamsar fleet.

Answer

CEO Alexander Saverys explained that the company is generally more inclined to sell older tonnage (over 15 years) at current high valuations, but only if the price is right. He also noted that while they are open to taking time charter cover for modern vessels, current market offers haven't been tempting enough. He clarified that keeping the 'Golden' prefix for Panamaxes respects Golden Ocean's history.

Eirik Haavaldsen of Pareto Securities asked if the company plans to increase its time charter coverage for 2025/2026 to de-risk its position following the increased financial leverage from the Avance Gas fleet acquisition. He also questioned the potential impact on G&A expenses.

Answer

Executive Kristian Sørensen responded that while not guaranteed, the company has historically been comfortable with a charter coverage level in the 30-40% range to balance market exposure with downside protection. He also confirmed that the current organization can absorb the 12 new vessels without any planned increase in G&A expenses.

Eirik Haavaldsen of Pareto Securities asked if the increased fleet size and financial leverage would lead to a more aggressive time charter strategy for 2025-2026, and questioned the impact of the acquisition on G&A expenses.

Answer

Executive Kristian Sørensen indicated that while not guaranteed, the company is comfortable with its historical charter coverage of 35-40% for downside protection and will likely maintain a similar strategy. He also confirmed that the current organization can absorb the 12 new vessels without increasing G&A expenses, suggesting potential for improved efficiency.