Rising tanker rates helped DHT Holdings to better year-over-year results, but the tanker owner remained in the red for the second quarter.
After the close Tuesday, the New York-traded company posted a $10.5m loss for the second three months of 2019 versus a $28.2m loss for the same period last year.
Ben Nolan, an analyst at Stifel, said the loss was narrower than forecast by his own numbers and the Wall Street consensus due to stronger than projected spot rates.
The $10.5m loss was a $0.07 loss on a per share basis, four cents deeper than analyst expectations.
When adjusted for a non-cash change related to a $7m interest rate swap, loss per share came in at $0.02, beating Wall Street consensus by $0.02.
Frode Morkedal of Clarksons Platou Securities, said core operating profit of $38m was ahead of the $34m projected in the market.
He explained the $26,200 per day average obtained by DHT’s VLCCs in the quarter beat his own $23,800 per day projection.
DHT is paying a dividend of $0.02 per share for the quarter, the minimum figure under its floating payout.
"Often in the case of these floating dividends, the market reacts negatively to lower dividends in a particular quarter, even if it is part of the normal course of business," Nolan said.
"Ultimately, the results were okay but not exceptional; thus we would expect shares to trade largely in line with the market."
Bookings below expectations
Arctic Securities maintains a buy rating for the stock but expects to lower its third-quarter earnings outlook since DHT booked 65% of its VLCCs at $21,100 per day, below $28,000 per day forecast.
"As such, we are likely to lower our estimates to reflect the bookings for Q3," analyst Lars Bastian Ostereng wrote in a client's note.
He said DHT must fix its remaining available days at $41,000 per day to meet its much higher estimate.
"However, we note that the tanker market has started to move upwards over the past couple of days," he said.
Middle East Gulf-China benchmark rates gained $23,200 per day today, up 50% from Friday, he added.
"Forward paper contracts have started to trade higher, and optimism is boosted beyond seasonal trends by expectations of higher US crude exports as three major pipelines connecting to the US Gulf are scheduled to come on line in coming months," he wrote.
