DHT Holdings Inc

NYSE:DHT

Earnings Call Transcript 2022-Q4

[Laila Halvorsen, CFO]

Thank you. Good morning and good afternoon, everyone. Welcome, and thank you for joining DHT Holdings fourth quarter 2022 earnings call.

I'm 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 February 16. 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 reports 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.

Our balance sheet is in excellent shape. The quarter ended with $126 million of cash. And in addition, the company's availability under our revolving credit facilities was $234 million, putting total liquidity at $360 million as of December 31. Financial leverage is about 19.4% based on market values for the ships. And net debt per vessel was $11.8 million at quarter end, which is significantly below current scrap values.

Reflecting on the strong freight market and our competitive cost structure, EBITDA for the fourth quarter was $95.4 million with net income at $61.8 million, equal to $0.38 per share. OpEx for the quarter was $19.9 million and included some periodical variations, mainly related to stores and spares. G&A for the quarter came in at $2.8 million.

In the fourth quarter, the vessels in the spot market earned $63,800 per day and the vessels on time charter made $36,100 per day. On average, the achieved TCE for the quarter was $56,900 per day. The first 3 months of 2022 was more or less breakeven. Our net income for the full year came in at $62 million, equal to $0.37 per share. DHT continues to show a very stable and competitive cost structure, and OpEx for the year was $73.8 million, equal to an average of $8,250 per day for the fleet.

On the next slide, we present the cash bridge for the quarter. We started the quarter with $65.7 million of cash and we generated $95.4 million in EBITDA. Ordinary debt repayment and cash interest amounted to $9.5 million, $4 million of new debt was issued in connection with the refinancing and $7.5 million was allocated to shareholders through the dividend payment. In December, we prepaid $23.7 million of long-term debt and the quarter ended with $125.9 million of cash.

In the fourth quarter, we entered into a $37.5 million refinancing of DHT Taiga with Credit Agricole. The facility is repayable in quarterly installments of $625,000 per quarter with a final payment of $22.5 million in addition to the last installment in December 2028. The new loan bear interest at a rate equal to SOFR plus 205 bps, which is equal to LIBOR plus 179 bps.

As mentioned on the previous slide, in December, we prepaid $23.7 million under the Nordea credit facility. The voluntary prepayment was made for all regular installments for 2023 and reduces the company's cash breakeven levels for the year. In January, we entered into a $405 million secured credit facility, including $100 million uncommitted incremental facility. The new facility will refinance the outstanding amount on the ABN AMRO credit facility and is secured by 10 of the company's vessels. The facility is repayable in quarterly installments of $6.25 million, equal to $625,000 per vessel with maturity in January 2029. The new loans bear interest at a rate equal to SOFR plus 190 bps, which is equivalent to LIBOR plus 164 bps.

As I mentioned refinancing of the Credit Agricole and the ABN AMRO credit facilities are in line with DHT-style financing, which includes a 20-year repayment profile and a 6-year tenor. Subsequent to these refinancings, DHT's weighted average cost of outstanding debt and revolving credit facilities is equal to LIBOR plus 177 bps.

With that, I will turn the call over to Svein.

[Svein Moxnes Harfjeld, President and CEO]

Thank you, Laila. We announced our new dividend policy last year. With our strong balance sheet and low newbuilding CapEx, we simply think our new dividend policy could distribute 100% of net income to be a good business. And as promised in our last earnings call, we are showing you the money.

Based on the '22 fourth quarter financial results, we will pay $0.38 per share as a quarterly cash dividend on February 24 to shareholders of record as of February 17. In connection with our new dividend policy, we will on a regular basis, inform the market on how much our ships have made on a time charter equivalent basis. This advice will be released shortly after every quarterly close, so well ahead of our quarterly financial results. Additionally, we will at the same time advice of bookings made to date for the subsequent quarter. The purpose is to be transparent and to guide on our ships' earnings, thereby assisting you all in setting out our expectations for our financial results.

We are here updating you on our bookings to date for the first quarter of '23. As you will see, we expect 510 days to be covered by our term contracts at an average rate of $33,900. We expect to have 1,390 spot days for the quarter, of which about 66% has been booked at an average rate of $56,400 per day. Combined, and as of today, this indicates bookings of 75% of the total days at weighted average earnings of $48,400 per day.

In the last line, we are estimating the spot P&L breakeven for the first quarter, allowing you to model a net income contribution based on their own assumptions for the unfixed spot days. You saw a dip in the freight rates towards the end of last year and there were decent resistant levels reflecting on the underlying market balance. And based on what we see now, we expect rates to improve for the balance of the quarter. We think our plan for guiding will make good sense in relation to our new dividend policy.

On this slide, we are sharing our estimated breakeven levels for the year of '23. The estimated P&L breakeven for the fleet as a whole is about $27,200 per day. This includes the increased annual depreciation of $7.2 million related to our retrofit program for exhaust gas cleaning systems. When adjusted for the fixed income that we have, the P&L breakeven for the spot fleet is about $25,400 per day. The estimated cash breakeven for the fleet as a whole to be $18,100 per day with the spot ships requiring to make $14,200 per day for the company to be cash neutral.

Keep in mind that our cash breakeven numbers include all true cash costs, i.e., OpEx, G&A, maintenance CapEx, cash interest and debt amortization. This illustrates a headroom of about $9,000 per day between cash breakeven and net income breakeven levels for the fleet with these potential cash flows being allocated to general corporate purposes.

Here, we provide you with an update on our project to retrofit the remainder of our fleet with exhaust gas cleaning systems. We have to date completed 2 of the retrofits and have 2 currently at the yard. Another 2 will enter the yard later this quarter and the final 2 early in the second quarter. The project is developing according to plan, both from a cost perspective and in terms of planned of our days for the ships.

The fuel spreads are holding up well, resulting in premium earnings for ships with systems installed. We are not facing any operational issues and are pleased with our decision to fit the last decks of our ships with these systems. Following this, our entire fleet will be fitted with exhaust gas cleaning systems. Additionally, these ships are attracting increased interest from customers for long-term charters.

There are very favorable fundamentals in our markets, and we expect this to have legs resulting in good earnings from the tanker sector. We see the early innings on the impact of China's reopening. The size of the announced second batch of crude oil import quotas for refiners in China suggests expansive domestic demand requiring increasing refinery runs. Non-OPEC supply is growing, supporting longer haul transportation. Additionally, geopolitical events are disrupting certain trades, reducing the productivity of the larger fleets. This disruption is not expected to disappear anytime soon. And as we all know, there's hardly any new supply of ships coming in.

The VLCC order book now stands at 2.2% of the sailing fleets. The older part of the fleet is growing quickly with about 14% of the fleet being older than 20 years of age and 30% being older than 15 years. These numbers will expand rapidly over the coming years and at the time when regulatory requirements are expected to result in reduced speed for a good part of the fleet. An increasing number of ships are engaged in trades either partly or fully sanctioned. This fleet is also referred to as the shadow fleets. Although these ships currently serve a purpose in the greater market, we find it hard to believe that they will stay in business over time or ever return to the compliant markets. We believe this could be viewed as the new scrapping in due course and our expectation is that the fleet will start shrinking over the next couple of years.

So going forward, our plan is clean and simple. You should expect continued strong discipline in executing our business model and strategy. We have a great team of people in a no-nonsense company culture, all focused on delivering safe, reliable services to our customers and strong results for our shareholders. We are tuned for rewarding times with the quality of fleet and ships all in the water, a rock solid balance sheet, premium revenue generation and a low cost structure. We think returning 100% of net income to shareholders to be fair and square and good business.

And with that, we open up for questions.

[Operator]

[Operator Instructions] We will take our first question and the question comes from the line of [Indiscernible] from Clarksons Securities.

[Unidentified Analyst]

So I noticed you had a debt capacity this quarter by $100 million. So could you talk about a bit your -- talk about -- a bit about your leverage position? And in general, would you be willing to increase debt on your existing ships to pay for the extra portion on potential new investments?

[Svein Moxnes Harfjeld, President and CEO]

So our investment strategy is very much countercyclical. And by building the balance sheet that we have done and likely we'll continue to do, this of course, forced the company to have investment capacity when we find the time to be right. And the sort of core of this is that we should hope and want to expand at the right time organically, i.e., without having to rely on new or external capital to do it. So if we can have a balance sheet that has the capacity to invest, those investments will be highly accretive to our owners. So that is the simple plan.

[Unidentified Analyst]

And a small follow-up. You still have a few older vessels in your fleet which has seen quite a significant increase in volume. So how do you look at these assets today and how is your decision process in making divestment decision now?

[Svein Moxnes Harfjeld, President and CEO]

I think it's unlikely that we will divest additional ships at this juncture. These ships are really high quality ships. They are used to service our customers. They make good earnings. And we expect them to continue to make good earnings in this time tanker market going forward. So they are not sales candidate anytime soon.

[Operator]

We will take our next question, and the question comes from the line of Jon Chappell from Evercore ISI.

[Jon Chappell, Evercore ISI]

Two quick ones for you, Svein; one on DHT-specific and one on the broader market. Just to DHT, to be clear, I think the payout ratio is perfectly clear and makes a ton of sense given your balance sheet and where we are in the cycle right now. But does that make fleet expansion and/or modernization kind of a mutually exclusive decision or do you still have the capabilities whether it's through adding finance or the part of the cash flow and not the net income that you're not paying out to consider that?

[Svein Moxnes Harfjeld, President and CEO]

Well, 2 things to that. I mean, this is a very relevant question. So of course, our balance sheet with the current leverage ratio has capacity to increase the debt level, if you like, to make investments. But we do find that the current asset prices are sort of too high to our liking to invest. So there is no sort of immediate urge to do that. But in due course, that is the way we are building investment capacity.

As we also tried to illustrate on the deck, there is meaningful difference between net income and breakeven and cash flow breakeven. So we will be able to continue to build some level of funding that can be used for either investments or even further deleverage if we have to. So let's see how all that plays out. But the size of our balance sheet is quite meaningful. And I think you should expect us to have the capacity to make a splash, if you like, when the time is right and then there's more also clarity on ship designs.

[Jon Chappell, Evercore ISI]

On the market, and this cycle is like no other, usually, the VLCCs have kind of lead the recovery both from a timing perspective and from a magnitude perspective, and that certainly hasn't happened this time around. Given the fact that a lot of the ton miles have been -- a lot of the ton mile expansion has been really kind of midsize-driven, and the fact that OPEC is maintaining their cuts through this year, how do you foresee the historical relationship between VLCCs and midsized crude kind of playing out over '23 and the longer term?

[Svein Moxnes Harfjeld, President and CEO]

Of course, these past sort of 9 months in particular has been annoying, if I can use a modest word being a pure-play VLCC company. But I think over time, things tend to sort of normalize because cost of transportation do matter for the customer base. And maybe not a quick fix piece and the smaller ships might still have an edge in the near future, but keep in mind that VLCCs tend to transport almost 50% of seaborne crude. And most of the new oil coming to the market this year is in Atlantic. And it's really for sort of also big clients, new large refineries in China, in particular. So we don't think all of this is going to go on smaller ships. And it's really inefficient as it is and it creates problems in ports with turnaround and some level of congestion, et cetera.

So I think there is a desire, at least for some of the big clients, to continue to use the big ships for sure. So it's hard to say when this will sort of go normal again. As I alluded to here in the comments, we don't think the disruption is expected to disappear sort of in the near -- immediately. So it will continue for a little while longer, but it doesn't mean that these will not make good money. So as we saw in the first quarter, we had some fixtures well above $100,000 a day in the mix. And I think it's certainly possible. It's not being hampered by the small asset classes.

[Operator]

We will take our next question, and the next question comes from the line of Omar Nokta from Jefferies.

[Omar Nokta, Jefferies]

Just wanted to follow-up maybe on Jon's question. We've seen some fits and starts of the VLCCs over the past 6 months or so; a strong run-up in the fall, a pullback here back in December, January and some momentum in the past couple of weeks. Can you maybe just give us a backdrop of what's been driving some of this volatility in your eyes? And then what you think is in store for this market over the next few months? Just some big picture perspective.

[Svein Moxnes Harfjeld, President and CEO]

I think some of the volatility was related to imports to China, Chinese buying of crude in the fourth quarter. So -- but we see this as sort of back on again. And even the last couple of weeks, the rates are up some 10-plus work scale points and it's still moving. And the used cost to the Far East trade is up at least $1 million. So -- and that's also still moving. So -- and it's really buying of crude and planning for this and we think it's related to the reopening of China.

And if you look at the quotas being pretty stronger not only for the crude oil import, but also for refined oil export. They are so strong numbers for both, but there is a little bit -- there's somewhat of a dislocation in the favor of imports. And I think the only way you can read that is that they expect domestic demand to expand quite meaningfully in China. And that is going to continue to drive rates for the big ships up we think.

[Omar Nokta, Jefferies]

And then you mentioned the Atlantic Basin just in your earlier comments, the SPR was a big driver of volumes late last year, but we haven't seen any real -- I don't think there's been any SPR releases this year. Is that affecting VLCC cargo demand out of the U.S. Gulf or is that not yet translating into any reduction in volume?

[Svein Moxnes Harfjeld, President and CEO]

It is of course have a positive impact in sort of team up to the beginning of the fourth quarter, but U.S. production is expected to increase. And you see that Europe, of course, are taking some of those incremental barrels in VLCCs. Those used to go on small ships. So we have a number of our ships trading to Europe, which are 2 to 3 to 4 port discharge. So I don't think you should -- it's not only about SPR, it's just about there's demand for that order and production is going up, although not by big numbers. But Brazil is up, North Sea is up and Guyana is up. So there's other areas, not just U.S.

[Omar Nokta, Jefferies]

And just maybe touching on the West Africa, that was also a bit of a -- or that was a bit of a laggard last year. Although there's been some positivity here recently, are you seeing any increase in volumes in that region?

[Svein Moxnes Harfjeld, President and CEO]

Mostly, it's been sort of sideways. I think they certainly have the potential to ramp things up if they can, for a lack of better word, get back together on many fronts. So there's still a lot of sort of disruptions and difficulties there, but they have the ability within OPEC quotas to increase production. And I think where the oil prices are, they have all the commercial incentives to make it happen as well. So we can only assume that they are working on trying to make it happen. So yes, let's see.

[Operator]

We will take our next question, and the question comes from the line of Chris Tsung from Webber Research & Advisory.

[Chris Tsung, Webber Research & Advisory]

I wanted to just touch on your [scrappage] program. It looks like you were able to complete 2 of the 8 and you have a few more now fighting to Q2. I was just curious, is this a function of where the spot market was in Q4, availability at the yards to retrofit these vessels, lining downtime with their dry docking schedule? Just trying to get a sense of what's going on there.

[Svein Moxnes Harfjeld, President and CEO]

So you have this spot on. So of course, the rates were very strong in the fourth quarter. So we had opportunity to take ships to the yards in November, if we wanted to, but we decided to push it back. And these voyages are quite long, so you do quickly go a couple of months out or 3 for your sort of next position. So 2 completed sort of in the first half of January. We have 2 in the yards now that will come out shortly. And then another 2 going in, in sort of early March. And the last 2, we expect early on the second quarter. And as I said, the [Indiscernible] time is according to plan. We plan for 30 days per ship. We're probably slightly improving on that, but that's sort of early days. We don't see really any challenges with the yard in terms of capacity to get these things done. So it's not driven by that in terms of yard capacity.

[Chris Tsung, Webber Research & Advisory]

And just -- I noticed that -- I think there's a consensus view there that the tanker market -- the tanker fleet is shrinking as you presented in your earlier remarks. Like what would it take for you to invest in fleet expansion? And also, would you be more interested in newbuilds or process a used vessel?

[Svein Moxnes Harfjeld, President and CEO]

If we are to buy ships in the water, they have to be of eco design. So I built 2015 or later because they have sort of superior fuel economics to their older siblings. At some point, we will also look at newbuildings. But there, we want to have more clarity on what type of fuel our space is going to consume in the future. So we are not -- in no rush to order anything. And then, of course, lastly, we want prices to be more in our favor before we deploy capital. So we do think we have 23 ships in the water, all moneymakers and the company will certainly be profitable on most forecasts now only in terms of earnings. So it will be steady as it goes.

[Operator]

We will take our next question. Our next question comes from the line of Anders Karlsen from Kepler Cheuvreux.

[Anders Karlsen, Kepler Cheuvreux]

I was just wondering, you said in your comments that you see an increase in interest for your -- the vessels that you fit to discoveries for period business. Are you contemplating to do additional term business or are you happy with the mix that you have between spot and term at present time?

[Svein Moxnes Harfjeld, President and CEO]

No, it's part of our plan to build more fixed income. And because we want to build that book in a measured way and take one step at a time and liquidity is not sort of super deep, but there is an increasing number of clients now asking for term contracts and the tenants are also getting longer and rates are going up. So you should expect us to eventually build more fixed income. But there has to be the right ships, the right counterparty, the right structure, the right money and all of that. So it's not as quickly done as fixing a spot ships.

[Anders Karlsen, Kepler Cheuvreux]

And any guidance in terms of what would be your ideal mix in terms of the sense of capacity and duration?

[Svein Moxnes Harfjeld, President and CEO]

So I'll give you a simple answer. So the higher the rates are moving, the more we will be willing to fix for longer. So we are sensitive to the money, right?

[Operator]

We will take our next question. And the question comes from the line of [Robert] Silvera from R.E. Silvera & Associates Marine Surveyors.

[Unidentified Analyst]

And I wanted to compliment you, we consider ourselves long-term investors. And I watched a few years ago when your long-term debt was over $900 million. And because of the way you run the company and the rates that surged back aways, you've brought it down to about $300 million, under $400 million, which I think is an amazing achievement on your part of good management.

We as shareholders look at the $0.38 dividend and the fact that it's 100% of the earnings as a nice and generous on your part, but we would personally like to see you issue like half of that dividend and the rest of it go again to prepayment of debt, because of the things that are going on in the interest rate markets, I don't see interest rates going down, particularly in a hurry again and that this company gets stronger and stronger with the minimum of debt, minimizing the debt, and it will put you in that position you spoke of strategically to move when the time seems right to move, because you have a rich cash position and a balance sheet with very, very little debt. So that's where we're coming from. And is there any chance that you would shift to a position of increasing the debt reduction rate?

[Svein Moxnes Harfjeld, President and CEO]

So the dividend policy we announced last year, so it's quite fresh. But we spend a lot of time thinking about how to frame this, and in particular, to the point that you are raising here that we have comfortable capacity to continue to reduce our debt. So as you might see from this report, in addition to paying out 100% of the net income, we also did an extraordinary prepayment of all the amortization of one of our largest facilities. We did that in end of fourth quarter. So that's sort of just continuing to working down the balance sheet even further.

And also, there is -- as I said, there's about $9,000 a day difference between the P&L breakeven and the cash breakeven. So -- and that's depending a bit on of our days and dockings in the year, but that is in the sort of tune of $70 million. So -- and that capital will be allocated for general corporate purposes, which could be investments. It could also be further debt prepayments. And in the cash flow breakeven, that includes the ordinary debt repayments, right, which for this year of 2023 is $30 million. So we try to be wise about it. It's not the only way to do things, but we think we have sort of struck a good balance here to continue to work on the balance sheet, whilst at the same time, reward our shareholders.

[Unidentified Analyst]

And I agree, you have done a wonderful job. I'm just encouraging you to give a little less dividend and more debt reduction. I think it will pay off in the long run. The share price will definitely go higher with lesser debt. Also, I have a question about your reference to parent. Can you -- I didn't realize we had some sort of a parent. And could you explain that for me a little bit more color on what is your reference to the parent in the report?

[Svein Moxnes Harfjeld, President and CEO]

I didn't refer to parent. So maybe my pronunciation of another word was bad or maybe the line was a bit crappy. So in what context did you hear the word parent? We don't have any parent.

[Unidentified Analyst]

Let me read it to you. It says, attributable -- this is in the profit loss after-tax. And it says, total comprehensive incomes/loss for the period attributable to owners of non-controlling interest and then attributable to the owners of parent -- what's the parent.

[Laila Halvorsen, CFO]

In this context, DHT Holdings, Inc. is the parent. So it's no other parent. It's DHT Holdings, Inc.

[Unidentified Analyst]

Thank you for the clarification. Well, just keep on doing the great job that you've been doing. We've been with you for years and we're really pleased. I think you're one of the best crude oil shipping companies in the world in my opinion and in the company's opinion.

[Operator]

We will take our next question. And the question comes from the line of Geoffrey Scott from Scott Asset Management.

[Geoffrey Scott, Scott Asset Management]

I don't mean to get into a debate with the prior caller, but you rightfully point out that you have $125 million approximately in the depreciation expense, non-cash, which is available for debt repayment and/or purchase of new ships. And so there's plenty of debt capacity if you pay out 100%.

My question has to do with the policy itself. When the announcement was originally made, it was effective immediately. If all things change, if it were to change to something other than 100%, would that change also be effective immediately or would that change be announced and effective after a 6-month period or a 12-month period or a 24-month period or some other timeframe? So the question is really, if it were to change, could it be done effectively immediately?

[Svein Moxnes Harfjeld, President and CEO]

That's a good question. So I think barring sort of a major curve in all markets and our business and what not, then I think to change this new policy, it would have to be in the context of some big strategic changes or a strategic move or a big M&A transaction where you need to phrase things differently. And if that is the case, I think we need to give the market and our holders sort of a good heads up rolling advances, supposed to say, starting next week. So that's just a general thinking behind that.

But it's been sort of our ambition all along to try to build a company that has the ability to really reward holders with the general dividends. And part of that is also to have lower leverage. So it's sort of one of the -- that's the sort of pillars of what we're trying to build. So -- and we don't want to be a company that is viewed as turning quickly from left to right and not to have visibility for our owners. So I think there was one person who told us some years back that what's wrong with you guys, you're just doing what you said you're going to do. And we took that as a complement and it's still with us.

[Operator]

[Operator Instructions] We will take our next question. And the question comes from the line of Michael Beall from Davenport.

[Michael Beall, Davenport]

I'd like to go back quickly to the dark or shadow fleet. What do you estimate the size of that fleet is? And presumably, we define it as ships owned by Russian interest. And can you comment, and perhaps it's speculation, towards the longer term ramifications of this ownership. Do you believe that they will behave in the marketplace like someone who is a commercial operator or do they have a little different agenda that may cause them to ultimately make the market tighter, worse? Can they weaponize this ownership of critical world infrastructure?

[Svein Moxnes Harfjeld, President and CEO]

That's a big question. So there's some nuances here in the shadow fleet. So you have the trade that is sort of -- is fully sanctioned being transporting crude from Venezuela and from Iran. So -- and then you have what is on our partly sanctioned and also by some companies is self-sanctioned, which is the transportation of Russian crude oil. And we have seen in the last 6 to 9 months in particular, a significant amount of funds being made available to companies in Dubai that are either own maybe -- whether it's owned by Russians or other people, there's a lot of variation there. But there is -- the source of funds is really the key for us in understanding what drives this.

And we do have a sense that a lot of these businesses that are buying older ships are funded by Russian capital in some shape or form. And they are buying these ships to transport Russian crude oil and they do that at a significant premium. So they make more money than the compliant market is doing. So there's a significant commercial incentive for them in being willing to do that in itself. Whether they have any sort of political agenda or military agenda and stuff like that, frankly, I don't know.

And in terms of size, we saw earlier this week one of the largest trading companies in the world suggested that this shadow fleet is moving up towards 600 ships in total. And this is not only VLCCs, obviously, it's also Suezmaxes, Aframaxes and product tankers that are transporting refined products. So this could well be. And I'm sure they are very careful about this because they are users or big users of ships. So they're probably monitoring this space to a great detail to avoid being entangled in something undesirable. So it is becoming a big deal, frankly.

And maybe the politicians that have set out current sanctions were also aware of this that it would happen. And it's an acceptable collateral damage, if you like, by trying to achieve the other things of depriving these countries or revenues related to selling oil. But there are some flag states here that are registered on number of these ships. We question whether they are actually following up the ships that are registered and whether they are complying with the laws and regulations.

So there's a lot of murky stuff going on. And we just can hope that the politicians that set out these strategies related to sanction also try to start to pick into these issues, because there's also going to be safety concerns. And I would wonder if we certainly have a big old oil tanker with 2 million barrels running around in a space that is also close to where people live. So say for the sake of argument, the Singapore Strait for that matter or West Indian Coast or in the middle of the Iranian Gulf or what not. So that is -- sadly, maybe that's what it takes for this to get up on the attention stand of politicians.

[Operator]

There seems to be no further questions at this time. So we'll hand back for closing remarks.

[Svein Moxnes Harfjeld, President and CEO]

So thank you very much to all for following DHT, and we wish you all a good day.