DHT plans to pay at least 60% of adjusted net income to shareholders from the second quarter of this year.
Trygve Munthe, co-chief executive of the shipowner, told TradeWinds that given the robust market outlook he feels the policy will lead to healthy payouts in the short and medium term.
DHT paid a nominal dividend of two cents per share during the downturn. The figure was increased to nine cents in the fourth quarter of 2014 and further to 15 cents in the first quarter of this year. However, previously the payout has always been at the discretion of the board.
Noah Parquette of JP Morgan said the new policy was a positive development as it gives investors more direct exposure to the currently strong market.
“While dividend amount could be roughly the same, we prefer this type of dividend policy,” he said.
As part of the policy announced today, DHT will also look to delever its balance sheet, a statement said.
While Munthe says the company's balance sheet was already strong there was no reason not to strengthen it further.
VLCCs in seven-year sweet spot
DHT's move comes with the tanker market enjoying the best year since the onset of the financial crisis.
Frode Morkedal of Clarksons Platou Securities notes the VLCC rates seen in 2015 are eclipsed only by the records set in 2008.
“VLCC rates are unseasonably strong,” he said in a report today. “We estimate that almost two thirds of the third quarter has already been concluded at $65,000 per day.”
He notes rates for VLCCs are currently at $80,000 per day, compared with the $25,000 per day breakeven level for most owners.
“Companies’ cash coffers are growing,” he said. “Shipowners are likely itching to use the cash; we expect both higher asset values and increased dividends.”
Shares in DHT last traded at $8.72 each giving it a market capitalisation of $809.66m.
Canyon Capital Advisors was the shipwoner’s largest shareholder with a 12.3% stake, according to its 2014 annual report.
Stephen Feinberg, Solus Alternative Asset Management, Aristeia Capital and Blackrock also held portions of over 5%, the report said.
Well-timed growth
DHT was one of the early movers on VLCC newbuidings when it placed contracts with Hyundai Heavy Industries in late 2013. It doubled the deal to six in early 2014.
Later that year it bought the seven strong fleet of Samco along with its related management company.
DHT has 14 VLCCs in the water alongside two suezmaxes and a pair of aframaxes. Its six newbuildings are worth a further $584m, according to VesselsValue.com.
