DHT Holdings Inc (DHT)

[downsideup]

Not really.

The OSG issue is a muddle and will remain that for a while.

The primary new impact is the imposition of expanded uncertainty.

DHT already running 41% day rates... and they're still operating profitably, on an operating basis, even if at a low level, with that ? Not sure what sort of impact should be expected, from changes made in contracts that you don't know much about ?

No way to know yet what impact OSG's travail will have on DHT's bottom line... relative to what they'd have experienced with a more natural progression in attrition in the contracts they're holding. It's a bit of a timing wrinkle being imposed by the changes at OSG... but, it's still a bigger issue that the market sucks than it is that having the market sucking is being destructive of OSG... and of DHT's stability in the result.

OSG is the channel through which that problem in the market is being made to have impact on DHT... but, it's the problem in the market that's the bigger issue, not the specific mode by which the problem is being transmitted to DHT and expressed...

FWIW, I think the board did the right thing by throttling back on the divvie, now, given the outlook has become increasingly uncertain, at a time when many had expected we'd be seeing improvement in the market. It's a good thing they've enabled themselves in having the degree of flexibility they do have, and its not a good thing that they're being forced to exercise it.

They're still better off, and well ahead of competitors, IMO, in having positioned DHT to be a survivor... but, the potential future benefits of being a survivor are being pushed out on the calendar, along with everything else...

In relation to the impact on trading, I don't think the market tends to value "survivability" or relative position versus competitors all that much... mostly because its difficult to measure... so, perhaps more price impact in trading should be expected to result from the change in dividend policy than from the changes in anything else... given the percentage in that number is a fairly reliable bit of market data contained in a single number, that does seem to have weight... independent of the "survivability" issues or relative position in the market.