DHT Banks $95M in VLCC Sale, Accelerates Fleet Modernization

HAMILTON, BERMUDA – December 29, 2025 – DHT Holdings, Inc. has announced a significant strategic divestment, agreeing to sell two of its older Very Large Crude Carriers (VLCCs) for a combined price of $101.6 million. The sale of the DHT China and DHT Europe, both built in 2007, underscores the company's disciplined approach to fleet management and its ability to capitalize on a robust tanker market.

The transaction is expected to close in the first quarter of 2026, generating approximately $95.0 million in net cash proceeds after the repayment of $5.6 million in associated debt. This move not only injects substantial liquidity into the company but also results in impressive accounting gains, with DHT projecting a $30.4 million gain from the DHT China and a $29.7 million gain from the DHT Europe. The sale is a textbook example of DHT's counter-cyclical strategy: selling assets at a market peak to fund future growth and enhance shareholder value.

Capitalizing on a Surging Tanker Market

DHT's decision to sell comes at an opportune moment. The global VLCC market is experiencing a period of exceptional strength, with spot earnings frequently surging towards $100,000 per day on key trading routes. This buoyancy is driven by a confluence of factors, including firm crude oil demand, particularly from Asia, and a tightening of available tonnage. Analysts project this market strength to persist through 2026, with average spot rates forecast to remain healthy, potentially between $55,000 and $65,000 per day.

This high-rate environment has a direct, positive impact on the value of secondhand vessels. With the global VLCC fleet's average age now exceeding 13 years and over 170 vessels already past the 20-year mark, modern and even well-maintained older tonnage is in high demand. The sale price of over $50 million for each 18-year-old tanker is a testament to the current market's appetite for operational vessels. While scrapping activity remains low due to the profitability of keeping older ships at sea, DHT's sale demonstrates the significant value that can be unlocked by divesting these assets at the right time.

This transaction is not an isolated event but part of a consistent pattern. Earlier in 2025, DHT sold two 2011-built tankers, the DHT Lotus and DHT Peony, generating $85 million in net cash. By strategically pruning its fleet, the company avoids the escalating maintenance costs and potential trading disadvantages of older ships while maximizing their residual value in a seller's market.

A Strategy of Renewal and Environmental Preparedness

Beyond the immediate financial benefits, the sale of the DHT China and DHT Europe is a critical step in DHT's long-term fleet renewal strategy. The move aligns perfectly with the increasing pressures of global environmental regulations, which are reshaping the shipping industry. With the International Maritime Organization's (IMO) stringent EEXI (Energy Efficiency Existing Ship Index) and CII (Carbon Intensity Indicator) regulations now in full effect, the commercial viability of older, less fuel-efficient vessels is under scrutiny.

By divesting these 2007-built ships, DHT lowers its fleet's average age and improves its overall environmental and operational efficiency profile. The proceeds from such sales are instrumental in financing the next generation of vessels. DHT is already well underway with this transition, with four new state-of-the-art VLCCs scheduled for delivery in the first half of 2026. These newbuilds—the DHT Addax, DHT Antelope, DHT Gazelle, and DHT Impala—are designed to meet the highest environmental standards. They are Tier III compliant for reduced NOx emissions and are engineered to be "class-ready" for multiple fuels, providing crucial flexibility as the industry navigates the path toward decarbonization.

This forward-looking approach ensures the company's fleet remains attractive to charterers, who are themselves facing pressure from customers and regulators to reduce the carbon footprint of their supply chains. Having already retrofitted its entire fleet with exhaust gas cleaning systems (scrubbers) by 2023, DHT has consistently demonstrated a proactive stance on compliance, positioning itself as a reliable, high-quality operator in a complex regulatory landscape.

The $95 Million Question: Fortifying the Balance Sheet and Rewarding Shareholders

The infusion of $95 million in net cash provides DHT with significant financial firepower and flexibility. The company has a clearly defined and disciplined capital allocation policy, which gives investors a transparent view of how these proceeds are likely to be deployed. Historically, DHT's priority has been to deliver strong returns to its shareholders. The company has a stated policy of returning 100% of its ordinary net income to shareholders through quarterly cash dividends and recently marked its 63rd consecutive payout in the third quarter of 2025.

Surplus cash from asset sales and strong earnings is typically channeled into a combination of strategic initiatives. A portion of the proceeds will likely support the company's newbuilding program, covering installments on the four VLCCs being delivered from its Korean shipyard. Further deleveraging the balance sheet is another key priority, and while the current sale extinguishes the debt on the two vessels, additional prepayments on other corporate facilities could further reduce interest expenses and lower financial risk.

Finally, the company has a history of opportunistic share buybacks, which can enhance earnings per share and signal management's confidence in the stock's value. This multi-pronged approach to capital allocation—balancing investment in growth, debt reduction, and direct shareholder returns—has been a cornerstone of DHT's reputation for prudent financial management and has helped it maintain a strong balance sheet with low leverage.

Navigating Future Waters with Enhanced Resilience

While DHT's strategic moves position it favorably, the company and the wider tanker market are not without future challenges. A recent surge in new VLCC orders, with 58 placed in the first eleven months of 2025 alone, has raised concerns about potential oversupply when these vessels begin hitting the water in 2027 and beyond. This influx could eventually put downward pressure on freight rates and asset values. Furthermore, the opaque operations of the "shadow fleet" of tankers involved in sanctioned trades remain a significant market wildcard; its potential reintegration into the mainstream market could exacerbate any oversupply issues.

However, DHT's proactive fleet modernization and fortified balance sheet provide a crucial buffer against such uncertainties. By selling older assets at peak values and reinvesting in highly efficient, regulation-compliant newbuilds, the company is building a more resilient and competitive fleet. This strategy not only maximizes profitability in the current strong market but also prepares DHT to navigate the cyclical downturns and structural shifts that inevitably characterize the global shipping industry. The sale of the DHT China and DHT Europe is more than just a profitable transaction; it is a decisive step in future-proofing the company's operations for the years to come.