Shipping analysts in Norway have greeted 2Q15 interim results of DHT Holding, the US listed tanker owner that is managed from Norway, with enthusiasm.
Nicolay Dyvik, Petter Haugen and Oyvind Berle, shipping analysts at DNB Markets said that DHT has seen significant growth and we argue that the stock should re-rate on a clean set of 2Q15 results beating expectations by 16% on adjusted net profit after several quarters with one-off charged linked to growth.
“Its new dividend policy, solid spot rate performance, all-in-house operations, recent underperformance and modest-valued price/net asset value make DHT our preferred crude play,” they said in a report emailed to IHS Maritime.
DHT on Tuesday reported 2Q15 net profit of USD22.2 million compared to a loss of USD7.1 million in the same period last year. Revenues rose to USD68.1 million from USD14.5 million. Firmer rates and larger fleet lifted the fresh figures.
On July 22, it had announced a new policy regarding dividend and capital allocation. “As a result of the current tanker market, DHT intends to return at least 60% of its ordinary net income (adjusted for extraordinary items) to shareholders. Further, DHT intends to use a significant amount of surplus cash flow after returning such capital to shareholders to delever (sic) its balance sheet,” it said at that time.
“While DHT has guided a dividend payout of at least 60% of net income, we expect the company to have a higher payout ratio in 2015,” said Erik Nikolai Stavseth and Kurt WAldeland, shipping analysts at Arctic.
“Our basis for a higher ratio lies in considering DHTs cash position after subtracting the estimate equity required for its newbuild programme and keeping cash position above USD30 million as a buffer.”
“This leads to about 70% payout ratio in 2015 – USD0.83/share or about 10% dividend yield. For 2016 and 2017 we have a lower DPS; but we argue DHT could be able to pay out about 25% of its market cap over the next 2.5 years while at the same time deleveraging its balance sheet,” they said in a market report emailed to IHS Maritime.