DHT Holdings rode spring's tanker rally to a considerable year-over-year improvement of its bottom line — and its third quarter could outpace expectations, too.
The New York-listed VLCC owner reported after the close on Tuesday a $136m profit for the second quarter of 2020, versus a $10.5m loss for the same period last year.
In its earnings report, the company attributed the jump simply to "higher tanker rates", as the three-month period saw Saudi Arabia and Russia locked in an oil price war that saw a huge amount of cheap oil dumped into a market experiencing depressed demand due to Covid-19.
For the quarter, DHT's VLCCs in the spot market earned an average rate of $92,100 per day, while its ships fixed on time charters earned $62,700 per day.
The high rates saw shipping revenue more than double from $106m for the second quarter of 2019 to $246m for the second quarter of 2010.
DHT owns 27 VLCCs, of which 10 are now on time charter.
It fixed six in April, then the 319,713-dwt DHT Stallion (built 2018) and 317,826-dwt DHT Scandinavia (built 2006) in June.
Then, analysts from Fearnleys said it expected DHT to post $159m in Ebitda for the quarter, lower than consensus estimates.
DHT ended up reporting $178m in adjusted Ebitda.
It could end up besting Fearnleys third-quarter rate estimates, too, which the investment bank pegged in June to be around $25,000 per day and $35,000 per day.
The tanker owner said it fixed 61% of its available VLCC spot days at $51,400 per day for the quarter, on a discharge-to-discharge basis.
It said the spot and time charter bookings equal 75% of the fleet's total capacity for the quarter, with an average rate of $51,200 per day.
For the first half, DHT made $208m, versus $7.2m for the first half of 2019. Its shipping revenues came in at $458m, rising from $238m for the first six months of 2019.
DHT shares closed down $0.12 to $5.61, but erased the losses in after-hours trading, jumping $0.22 to $5.82.
