VLCC market propels DHT in fourth quarter

Tanker owner hits profit marks and says shares are ‘attractive investment’.

DHT announced a $50m buyback after delivering a fourth-quarter result that met expectations as tanker rates remain strong.

The New York-listed tanker owner reported net income of $32.4m, up 13% from a year earlier, while earnings per share of $0.31 was in-line with analysts average estimates. Revenue net of voyage expenses rose 69% from a year ago to $80m.

Thanks to its VLCC fleet, DHT saw time-charter equivalent (TCE) earnings of $62,500 per day in the spot market, while full-year 2015 TCE earnings came in at $58,700 per day.

The company reduced its spot exposure to near 50% of fleet tonnage from 61.5% in the year-earlier quarter.

Recent charters underscore continued strength in crude tanker markets as DHT highlighted recent charter extensions on VLCCs at higher rates. It has secured 2,165 days of TCE earnings representing $101m in value.

More VLCCs will hit the water as DHT says it expects four fully funded newbuildings to hit the water from March through October. It took delivery of two other VLCCs during the fourth quarter.

Amid the good earnings, DHT maintained its 60% payout policy on dividends, and announced that it plans to buy back $50m in stock as its shares “currently represent an attractive investment opportunity,” DHT said in a statement.

Investors greeted the news positively with DHT shares gaining about $0.22, or 4%, in after-hours trading to reach $5.92 per share.