3 Factors That Contributed to DHT’s 4Q15 Revenue Rise

What Do DHT Holdings' Strong 4Q15 Results Say about Its Future?

(Continued from Prior Part)

Uptrending revenue

DHT Holdings’ (DHT) revenue rose to $94 million in 4Q15, compared to $92 million in the previous quarter. As tanker rates are usually higher in the fourth quarter, it’s important to compare revenues with the same period of the previous year. 4Q15 revenue compared to 4Q14 revenue was higher by 31%.

DHT Holdings operates its tankers in both the spot and time charter markets, just like its crude (DBO) tanker peers Teekay Tankers (TNK), Frontline (FRO), Tsakos Energy Navigation (TNP), and Euronav (EURN), and unlike Nordic American Tanker (NAT), which operates its vessels only in the spot market.

What impacted revenues?

Many factors contributed to DHT’s higher revenues in the fourth quarter:

• DHT’s VLCCs (very large crude carrier) operating in the spot market achieved time charter equivalent earnings of $62,000 per day in the fourth quarter—4% higher than in the previous quarter.

• The company added one tanker, a VLCC DHT Jaguar, in November 2015.

• During the quarter, the company increased its time charter rates for three VLCCs.

What to expect?

• The company took delivery of DHT Leopard in January 2016. This will add to its revenues in the first quarter.

• So far, the company has booked 66% of its operating days in 1Q16 at $73,000 per day. This is higher than the rates it achieved in 4Q15. Tanker rates are generally higher in December and January, so the average rate for the first quarter may come down from $73,000 per day.

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In the next article, we’ll look at DHT’s costs.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Key Highlights of DHT’s Earnings and Conference Call

• Part 3 - How Are Oil Prices Affecting DHT’s Costs?

• Part 4 - Where Are DHT’s Earnings Heading?