Good day, and thank you for standing by. Welcome to the Q3 2022 DHT Holdings, Inc. Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star one and one on your telephone. You will then hear an automated message advising your hand is raised. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Laila Halvorsen, CFO. Please go ahead. Thank you. Good morning and good afternoon, everyone. Welcome and thank you for joining DHT Holdings third quarter 2022 earnings call. I am joined by DHT's President and CEO, Svein Moxnes Harfjeld. As usual, we will go through financials and some highlights before we open up for your questions. The link to the slide deck can be found on our website, dhtankers.com. Before we get started with today's call, I would like to make the following remarks. A replay of this conference call will be available at our website, dhtankers.com, until November fifteenth. In addition, our earnings press release will be available on our website and on the SEC EDGAR system as an exhibit to our Form 6-K. As a reminder, on this conference call, we will discuss matters that are forward-looking in nature. These forward-looking statements are based on our current expectations about future events as detailed in our financial report. Actual results may differ materially from the expectations reflected in these forward-looking statements. We urge you to read our periodic report available on our website and on the SEC EDGAR system, including the risk factors in these reports for more information regarding risks that we face. The company continues to show very strong and healthy balance sheet, and the quarter ended with $65.7 million of cash. In addition, at quarter end, the company's availability under both revolving credit facilities was $235 million, putting total liquidity at $301 million as of September 30. Financial leverage is about 22.6% based on market values for the ships, and net debt per vessel was $15.4 million at quarter end, which is significantly below current scrap values. Looking at the P&L highlights, EBITDA for the third quarter was $35.6 million, and net income came in at $7.5 million, equal to $0.04 per share. The results includes a gain related to sale of vessel of $6.8 million and a non-cash gain in fair value related to interest rate derivatives of $2.8 million. The company continues with good cost control, with OpEx for the quarter at $17.6 million and G&A for the quarter at $3.9 million. In the third quarter, the company achieved an average TCE of $24,400 per day, with the vessels on time charter earning $35,300 per day and the vessels in the spot market making $22,000 per day. On the next slide, we present the cash bridge for the quarter. We started the quarter with $105.8 million of cash, and we generated $35.6 million in EBITDA. Ordinary debt repayment and cash interest amounted to $7 million, while $15.3 million was allocated to shareholders through dividend payments and share buybacks. $2.3 million was used for maintenance CapEx, while change in working capital amounted to $24.1 million, mainly related to the change in accounts receivable and accrued revenues due to increased freight rates. Net proceeds from sale of vessels were $24.8 million, while $50 million was used to prepay long-term debt, and the quarter ended with $65.7 million of cash. In August, we sold the 2008-built DHT Edelweiss for $37 million, and the sale generated a gain of $6.8 million. In connection with the sale, we repaid outstanding debt of $12.2 million. The vessel was delivered during the third quarter with net proceeds of $24.8 million. The vessel was not fitted with an exhaust gas cleaning system and is due for its third special survey and the installation of ballast water treatment system in the first quarter of 2023. Following the sale, the average age of our fleet has been reduced and our AER and EEOI metrics improved. In September, we prepaid $50 million under the Nordea credit facility. The voluntary prepayment was made under the revolving credit facility tranche and may be reborrowed. Also, in September, we entered into a five-year time charter contract for DHT Puma or substitute at $38,000 per day. Charters have the option to extend two additional years at $41,000 and $45,000 per day, respectively. The vessel is expected to deliver into the contract after the exhaust gas cleaning system installation in Q1 2023. Switching now to capital allocation. In September, the company announced a new dividend policy with 100% of net income being returned to shareholders in the form of quarterly dividends. The policy was implemented from the third quarter of 2022, and the company will pay a dividend of $0.04 per share for the quarter. It will be payable on November 29th to shareholders of record as of November 22nd. This marks the 51st consecutive quarterly cash dividend. During the quarter, the company purchased 1.5 million of its own shares for an aggregate consideration of $8.8 million at an average price of $5.87. All shares were retired upon receipt, and the company currently has 162.7 million outstanding shares. For the quarter, the company is therefore returning $15.3 million to shareholders, $6.5 million in dividends, and $8.8 million in share buybacks. With that, I will turn the call over to Svein. Thank you, Laila. On this page, we're showing you a new table with the purpose to provide better guidance with respect to the quarter succeeding the one we are reporting on. For the fourth quarter of this year, we have a time charter book at an average rate of $34,800 per day, covering some 510 days, roughly a quarter of the period as a whole. As of today, we have booked 69% of our 1,540 available spot days at $61,800 per day. Further, we are providing the estimated spot P&L breakeven for the period, allowing you to model the TC income based on your own assumptions for the unfixed spot days. We can tell you this much. As of today, the rates we are seeing for the balance of the quarter are substantially higher than what has been secured on average so far. We think this piece of information that we will continue to include in our releases going forward to make good sense in relation to our new dividend policy of 100% on net income to be paid at quarterly cash dividends. As announced earlier this year, we have embarked on a project to retrofit eight eco ships with exhaust gas cleaning systems, taking our fleet with these installations to 100%. The current spreads between VLSFO and HFO are attractive, offering payback on the retrofit investments inside the year. The first vessel will be retrofitted towards the end of the year, being a vessel that will enter into a long-term time charter upon completion of the installation. Following this, we will retrofit the DHT Colt and the DHT Stallion during the first quarter of 2023. Both vessels have natural dry docks, hence no commercial off-hire will be taken. For the balance of the project, we are adopting a pragmatic and dynamic schedule based on the vessel's whereabouts and their commercial opportunities. A further update will be provided on the next earnings call. We are now in a favorable business environment with rewarding economics for most participants. We have a robust oil price, we have healthy refining margins, and we have a strong freight market. Companies are in general profitable and in all its simplicity, people want to do business. Certainly fun and rewarding times matched by a promising outlook. Because of the conflict between Russia and Ukraine, oil trading is encountering disruptions for many routes. These trade disruptions result in increased transportation distances, which reduces the productivity of the tanker fleet, pushing rates beyond what already supporting dynamics would have done. As you will see from this slide, transportation distances for European imports could be upwards to 7-11 times that of imports from the Baltic region. For Russian exports to Asia, one can see distances upwards to the same multiple of 7-11 times when compared to Northwest Europe. Some trades will attract additional vessels into the shadow fleets on top of those trading sanction barrels from Venezuela and Iran. This activity has held all the ships away from scrapping despite healthy scrap prices. As ships that enter these murky trades are unlikely to return to the compliant markets, one could look at this development as in due course being the new scrapping. As we have suggested before, there's an increasing probability of the tanker fleet to decrease at the time when order books are low and shipyards are essentially full for the coming couple or three years. In sum, you should expect us to continue with the disciplined execution of our business model and strategy. We are well-structured for cyclical markets, among others, supported by a strong balance sheet and healthy liquidity. The freight market has most certainly recovered with strong freight rates and a promising outlook. We are tuned for this recovery with increasing spot exposure into an environment in which we are set to make significant profits. We have a solid track record in allocating capital. Based on our new dividend policy with 100% on net income to be distributed as quarterly dividends, we have every intention on showing you the money. With that, we open up for questions. Operator? As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. Please stand by while we compile the Q&A queue. Our first question comes from the line of Frode Morkedal from Clarksons. Please go ahead. Your line is open. Thank you. Hi, Sven. Good afternoon. Good afternoon. First question I had is on the dividend policy in respect of the tanker cycle. I remember you had this nice cycle chart in the past. Where you talked about how you invest and when you harvest depending on where you are in the cycle. Maybe you could elaborate on that in terms of the dividends. Would you then change the policy, whenever the up cycle ends? Well, you know, then this policy that we had with the 60% or minimum 60% of ordinary net income was put in place in 2016. At that time, our leverage level was sort of in the 50-55% zip code. It has been brought significantly down since then. As a reflection of the balance sheet and the cost structure and also that we have no, you know, CapEx program for new ships going forward, we felt it right and timely to introduce this new dividend policy. You know, I think all these things will have to be, you know, looked at depending on the capital structure and where you are. Our intention is certainly that this policy should be sustainable and not just be something that we will change, you know, with short intervals. We would like to think it's well thought through and then that we will have the capacity to continue with this for a long time. Keep in mind that there is also a meaningful difference in net income and cash flows. There is ample cash flows to, you know, or ample room then to, you know, service debt and also potentially do prepayment should we so desire. Perfect. That's great. Second question on the market. I guess it's just a few weeks time, and you have this ban on the Russian oils coming into play. Do you notice any change already now in terms of chartering behavior, trade flows or anything else? How do you see this developing? I guess, you know, we see some activity that we are not part of and not sort of in, you know, involved in. We only have a sort of high level view on this. We do see some intentions to bring oil out of the Baltic in particular out to areas where it can be transshipped onto larger ships and then to be sent to the Far East. Not only are there longer distances, but this sort of mode of transportation is a bit inefficient and time-consuming. Again, you are sort of reducing the productivity of the fleet. It's a bit early days, and I think people are probably planning a lot, you know, in their offices without really showing their cards just yet. I think, towards the end of this month, we will see some real activity, I think, already get going. Yes. Interesting. Thank you very much. Thank you. Thank you. We'll now move on to our next question. Please stand by. Our next question comes from the line of Jonathan Chappell from Evercore ISI. Please go ahead. Your line is open. Thank you. Good afternoon. I have two-parters for you. It looks like the Colt and the Mustang were extended by a year into the third quarter of next year. Wondering if you can give a sense for the type of increase in the rate from the prior 1-year contracts, just given the strength of the market since that time. The second part to that time charter question is, the Puma looks like a, you know, phenomenal rate. What's your appetite for long-term contracts like that, especially contemplating your new dividend policy? The two first contracts, one was extended basically at the same rate that it had. It was an optional year that was declared earlier this year. Similar, the other one is also a business continuation, if you like. These rates are of course below the current market, but these are time charters that we of course enjoyed greatly last year and the first half of this year. It is the sort of tail end of that. We wanted to get something in the book, and we have, you know, done these couple of three ships for longer periods, as you've already seen. Right now we're taking, you know, big step back, and we want to see rates appreciate, and also hopefully with the much, you know, or with commencements, much further out. We would expect the three-year rates today to be closing in at around the $50,000 mark. I think with the current freight market, that's basically $90,000-$100,000 a day. I think you will see more of these opportunities in the longer run. We would like to wait and want to enjoy the spot market now for a good while longer before we really build on this. On the right opportunity and, you know, with the right client and the right ship and all of that, you know, if sort of significant monies can be had, we will entertain that. There will be meaningful spot exposure for a while longer, so. Okay. The other topic is the scrubber installations. I just wanna make sure I understood. You said the Colt and Stallion natural dry dock date, so there's no operational off-hire time. Does that mean they still earn, you know, full quarters worth of, you know, TC earnings even though they're undergoing the retrofits? No. You know, these two ships are scheduled for the first special survey now. They were built in 2018, and those survey dates are in the first half of 2023. They would be off-hire in any case. This is when we're gonna do the. Got you. The incremental off-hire. Exactly. This is when we're gonna do scrubber installation. Okay. When we think to the other, you know, the pragmatic schedule, it almost seems like that means we have to look through the first quarter, so should we think like 2Q, 3Q of next year? The final part of this topic is, are these like 25-30 days or a little bit lower since you're trying to manage them around their schedule and their voyages? You know, this is very much depends on where you are. Of course, as you know, these voyages that you fix in the spot market, they are easily 45-50 days, if not longer. You want to have also sort of a, you know, a favorable geographical whereabouts on the ships when you go to dry dock. We will take this step by step, frankly, and we have, you know, limited guidance beyond that at this point. I think you need to rely on us to be commercially apt and try to do this as good as we can. If the opportunities, you know, are reflective of the current spot rates, of course it's important for us to try to put that in the books and then wait for a little while longer. Okay. Thank you, Svein. Thank you. Thank you. We'll now move on to our next question. Please stand by. Our next question comes from the line of Benjamin Nolan from Stifel. Please go ahead. Your line is open. Hi. Good morning. Good afternoon. This is Michaela Rogers on for Ben. Thank you for taking our question. We just kind of wanted to take it back real quick to the new dividend policy. I know you mentioned the intention is the policy, you know, should be sustainable for some time. We just was wondering if you could provide a little insight on maybe why the change at all versus potentially allocating the excess capital for fleet renewal or growth. Thank you. As we stated, you know, our balance sheet has been brought down with a very robust structure or very low leverage. At the same time, we have no investment program. The latter point is a reflection of where asset values are. We think they are, you know, too high to buy ships today at the required rate for those investments to be attractive over sort of a 20-year horizon, we think may be good. We are not sort of the momentum investors that will buy a ship with expectations of having a feel-good factor in the next 12 months because the asset price might be slightly higher. We want to invest and operate the ships over a longer period of time. This is the reason for that. We bought two secondhand ships last year. We were set to buy some more, but prices, you know, moved up too quickly. What we did instead, of course, as you know, we bought back about 6% of the company stock, and the cash spent on that was equal to two ships. We bought our own ships essentially then at a discount, so sort of happy with that investment as well. Again, our balance sheet is robust. It doesn't. This new dividend policy does not prevent us from making investments when the right opportunity arise. We have also access to debt if we are interested. I would like to think that we have thought this through and are not sort of precluding ourselves from also investing in due course in the business. Great. Thank you so much. Thank you. We'll now move on to our next question. Please stand by. Our next question comes from the line of Omar Nokta from Jefferies. Please go ahead. Your line is open. Thank you. Hey, Svein. Just a couple of quick ones for you. Just first on back to the dividend. You know, the 100% earnings payout policy, just wanted to be clear, it looks like you paid out the full earnings for the third quarter of $0.04, which includes gains and other items. Should we think going forward that the full payout here is gonna be, you know, reflective of gains? So you'll pay out the gains but then also hold back any losses? And how do you think about the cash and non-cash portion of that going forward? In the past, you know, we have let the shareholders have the benefit of cash gains, extraordinary cash gains in the P&L and also in a way, the benefit of not including non-cash losses, right? We think about net income, as clearly stated, without any caveats. Okay. All right. Got that. Then just, you've gotten this question in the past and just maybe could you explain again, maybe just the difference in terms of the accounting treatment, in terms of discharge to discharge, versus say load to discharge because of the wide difference in what you've reported? All right, you got $22,000, but then you also got $27,000 on discharge to discharge. I just want to get a sense if you wouldn't mind just reminding us what the differences are and how that affects your earnings over time. Yeah, of course, I can answer that. On the previous revenue accounting, we used discharge to discharge, meaning that we included the revenue from the previous voyage. Now what we need to do according to IFRS 15 and the new revenue, or it's not new anymore, but the revenue policy is that from discharge from the last voyage and until the vessel has loaded, there is no revenue that is included in our books. It is, of course, the same revenue for the total voyage, but it's reflected on a much less period of time. Thanks, Leyla. Does that mean basically that, you know, you'll have maybe wide variances between both figures, but as you know, do they smooth out over time effectively? They definitely smooth out over time. You'll of course have exactly the same revenue, but it's reported on a different period. From load to discharge. It clearly then is more volatile. In a market with increasing freight rates, you will then have to postpone in a way the revenue, and you will gain that again in the next quarter. Okay. Thank you. I'll turn it over. No, but Omar, as you know, as confusing as it is, right? You know, as a shipping company, when we trade our ships, we focus on discharge to discharge, which is sort of the commercial level evaluation, right? So we can disregard in a way when making calls on what to do with the ships, what the accounting treatment is. The money is made, it's just in different periods. Mm. Yeah. Yeah, makes sense. Thank you. Thank you. We'll now take our next question. Please stand by. Our next question comes from the line of Chris Tsung from Webber Research. Please go ahead. Your line is open. Hey. Good morning, Svein. How are you? Good morning. Well, thank you. Thanks. Just curious on your thoughts on this shadow fleet. Do you expect it to mostly involve VLCCs or, you know, do you see some demand for Suezmax or Aframaxes as well? I think it will be across the board. Of course, some of these trades will not be sanctioned, so then it's not really a problem. There are some sanctioned trades and then, you know, I think whether it's Aframax, Suezmax, and these, there will be a mix here. It's hard to actually have a view on how many, or which size. Great. No, I appreciate that. Now for the five-year charter with the Puma, I know it's your second one, I believe, where you get the Osprey from last quarter. How many more are you guys planning to fix or put another way, like, will DHT be a company that mostly has time charters, or do you still plan to keep some spot exposure? We like to have both, but it depends on where we are in the cycle and importantly, it depends on the nominal money. For now we will take a step back and we will in due course try to develop additional fixed income, but we want the rates to be, you know, higher than where they were earlier this year. As I mentioned earlier on the call, we believe that the three-year rates are sort of in the ±$50,000 territory, depending on the type of ship and the position and so forth. You know, thinking a bit academically about it is possible in due course to sort of fix a meaningful portion of the fleet at very rewarding rates. I mean, you know, I underscore very rewarding rates. Of course, if you can create visibility on earnings and also in relation to our dividend policy, that might have some merits. It's a bit hard to say that, yes, that will be the case. It will not be the case. I think you have to trust our commercial abilities and trying to make the most out of it. Right. No, of course, it's definitely within context of your dividend policy, just trying to give some sort of stability towards it. Just one final one. Just about the CII, the upcoming CII regulation. Just curious, you know, with you having two ships out there for five years, just wondering would the responsibility fall on the owner or the charter of the vessel going on till it's starting January 2023. The EEXI is a calculation based on the vessel's abilities and its design. These ships are eco ships, and they have no issues whatsoever with the EEXI and the CII for many years to come. We have of course done the calculations for the entire DHT fleet. I have a sort of very clear view on how it will develop. A little bit by chance, if you like, the demographics of DHT's fleet, it's so that when 2026 comes about, which is sort of the next leg up in restrictions or in regulations. That is sort of the time when our oldest ships are sort of closing in on retirement. We don't really see any commercial impairment for DHT as such. Of course, a customer that is considering taking a ship on time charter, they would need to weigh for their, for their own sort of book, if you like, on what sort of emission levels they want to have in securing transportation services. It's our responsibility to make all these calculations, and it's us as ship owners that will have to report and manage this. Okay, perfect. Thank you, Svein, for the color. That's it for me. Thank you. We'll now move on to our next question. Please stand by. Our next question comes from the line of Anders Redigh Karlsen from Kepler Cheuvreux. Please go ahead. Your line is open. Yes. Good afternoon. The market is looking very promising, but to put the deal away, what do you consider to be the main risk factors linked to market developments going forward? There are, of course, some macroeconomic clouds out there and then, you know, inflation and also the efforts that the central banks are doing to stall that and how that will impact the general economic growth. Of course, if we do, you know, certainly get the world economy into recession and a hard one, that will of course impact the oil consumption and again, then demand for oil and demand for transportation. I think that's sort of the big issue. If you look sort of down to the industry, more insulated, I think there's, you know, a long time ago since we've seen so many positive elements in structuring the market that we are entering into now. All in all, I think that looks very good, barring sort of any macroeconomic events that would pose a big negative correction. Okay. That's all for me. Thank you. Thank you. We'll now move on to our next question. Please stand by. Our next question comes from the line of Rick Sherman. Please go ahead announcing your company name. Hi, Rick Sherman, private investor. Thanks for taking my question. I just got a quick question about the sale of the ship for $37 million. On the mathematics, where you paid off $12.2 million in debt for a net of $24.8 million and a $6.8 million dollar profit. Is that basically because your carrying equity cost on the thing was $18 million? How did you derive the $6.8 million profit on that ship? The profit in the P&L is the balance between the net proceeds and the book value of the ship. The ship was acquired- Okay. The ship was acquired in 2017 and has a bit been depreciated since then. Perfect. Thank you very much. There are no further questions at this time, so I'll hand the conference back to you. Well, thank you very much to all for following DHT. That's appreciated. Have a good day ahead. Bye-bye. This concludes today's conference call. Thank you for participating. You may now disconnect. Speakers, please stand by.