Laila Halvorsen - CFO Svein Moxnes Harfjeld - Co-CEO Trygve Munthe - CO-CEO

Jon Chappell - Evercore Michael Webber - Wells Fargo Espen Landmark - Fearnley Fotis Giannakoulis - Morgan Stanley Noah Parquette - JP Morgan Randy Giveans - Jefferies Herman Hildan - Clarksons

Thank you. 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 through August 16, 2018. In addition, our earnings press release will be available on our website and on the SEC’s 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, including DHT’s prospects, dividends, share repurchases, and debt repayment, the outlook for the tanker market in general, daily charter hire rates and vessel utilization, forecast of world economic activity, oil prices and oil trading patterns, anticipated levels of newbuilding and scrapping and projected drydock schedules.

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’s EDGAR system, including the risk factors in these reports for more information regarding risks that we face.

I’m joined by DHT’s Co-CEOs Svein Moxnes Harfjeld and Trygve Munthe. With that, I will turn the call over to Trygve.

Thank you, Laila. Good morning and good afternoon everyone.

Welcome and thank you for joining DHT Holding second quarter 2018 earnings call. As usual, we’ll go through some highlights before we open up for your questions.

The link to the slide deck can be found on our website dhtankers.com. The second quarter was tough in VLCC freight market and that certainly affected our performance.

EBITDA came in at $12.7 million and the net loss at $28.2 million including a onetime non-cash charge of $4.3 million related to the large refinancing we did in the quarter. Adjusted for that, EPS was negative $0.17 for the quarter.

The average earnings for our VLCCs came in at $14,700 per day, with the ships and time charter earning $22,000 per day and the spot fleet earning $11,900 per day. As we talked about on the last earnings call, the industry has adopted new accounting rules this year, IFRS 15.

And whilst we had a positive effect from IFRS 15 in the first quarter, we had a negative one in the second quarter. Had the new rules not been adopted, our earnings from the spot VLCCs would have been $13,600 a day for the quarter.

The third quarter is off to a better start and we can inform you that we have to-date 60% of our spot VLCC capacity at $21,100 per day. As previously announced, we took delivery of our two VLCC newbuildings DSME in Korea, during the quarter.

We refinanced 13 of our VLCCs in the new back facility in the amount of $484 million; and finally, we increased our revolving credit facility to $57 million. Than after quarter-end, we have taken delivery of the first of our two newbuildings from Hyundai Heavy Industries.

We have entered into agreement retrofit scrubbers on 12 of our existing VLCCs, and we have recently entered into five-year interest rate swaps for a total $169 million, with a fixed rate for the 3.01% as compared to the three months LIBOR rate of about 2.34%. The amount now fixed equals 22% of our current bank debt.

Looking at the income statement. It is easy to see that the weak results for the quarter were predominantly caused by weaker top line as well as higher interest expense.

As already mentioned, the higher interest expense includes the noncash charge of $4.3 million related to the refinancing in the second quarter. Further, top line was negatively affected by IFRS 15 by some $2.7 million.

On the cost side, the Company again demonstrated good control and delivered competitive numbers. VLCC OpEx for the quarter was just over $7,500 per day and G&A costs came in just below $4 million for the quarter.

Our Board of Directors has elected to pay a cash dividend of $0.02 per share. This marks the 34th consecutive quarterly dividend.

The dividend will be paid on the 31st of August to shareholders of record as of August 24th. Then on to the balance sheet.

Our balance sheet remains in good shape, both from a leverage and the liquidity perspective. Total liquidity stands at a $134 million.

And interest bearing debt to total assets based on market values of the ships is at 53%. Then, the cash base for the quarter.

So, as you can see our cash position actually grew by $7 million through the quarter. On the operating side, we see that the EBITDA was insufficient to cover debt service and dividend, but when including the changes in working capital, the cash generation becomes positive.

Further, as discussed on prior calls, we borrowed marginally more on the two DSME newbuildings than the final bill to the yard. [Ph] So, we saw some positive cash inflow in connection with the delivery of these two vessels.

And with that, I will turn the call over to Svein.

Thank you, Trygve. We recently announced the project to install exhaust gas cleaning systems, also known as, scrubbers, on 12 of our sailing VLCCs.

The ships in question are built between 2004 and 2012. The supplier is Alfa Laval and we have secured shipyard capacity for the project.

All these ships are expected to be fitted during 2019 and as such ready for operation by the 2020 IMO implementation date. Alfa Laval is the leading supplier of shipboard exhaust gas cleaning systems with more than 100 scrubbers in operation.

Alfa Laval’s track record offers credibility with respects to timely project execution and reliable operations. We have been working on preparing DHT for the IMO 2020 deadline, since 2017, and well equipped for what we regard as an opportunity rather than a threat.

The ships, once with fitted with scrubbers, will potentially create a super-profit through their ability to consume regular heavy fuel oil versus compliant fuels that are expected to be priced at a meaningful payment. We have received numerous proposals to finance the project, and this is currently work in progress.

We have a whole host of avenues available to us. We consider opting existing mortgage step, ring financing or expert credit agencies as the most attractive.

In addition, we have investors keen to get in on economics, customers willing to fund through employment as well as commodity traders and fuel suppliers offering various structures. As such, we are confident to finance the majority of the project at attractive terms.

You should note that the well-established scrubber suppliers have increasingly committed to their capacity to deliver in 2019. Hence, we are pleased with the timely project that we have put in place.

As for the freight market, we still retain our positive outlook with the following four key reasons teeing up for a rewarding future. One, healthy and steady global oil demand with 1.3 million barrels per day expected for the remainder of the year and 1.2 million barrels per day for 2019.

Two, the inventory drawdown gain is in the second half and likely in the last quarter. Three, negative fleet growth year-to-date, possibly in the amount of 10 VLCCs.

Four, order book at 14% of the total fleet, and this should be compared to 24% of the fleet in excess of 15 years of age. Further, I will try to shed some lights on the near-term events and their impact on the freight markets.

The recent trade battle between the U.S. and China is resulting in China reducing imports of U.S.

shale oil. We understand that some 375,000 barrels per day of U.S.

shale might be lost from this trade. Whereas this sounds as a negative, we see signs of the North Sea and South America stepping into fill the void, and these trades are also VLCC trades.

Importantly, these trades involve [indiscernible] and are of similar duration as the U.S. export trades.

Hence, it could be neutral for VLCCs. South Korean refiners have upped their import of U.S.

shale and this trade has recently represented 4 to 5 VLCC cargos per month. We also note that India is increasing U.S.

shale purchases, reported to be about 10 million barrels for August. The U.S.

shale could also divert sales to Europe to partly replace loss of Iranian [ph] barrels and likely in smaller ships. Saudi recently increased its supply and this might impact what is to come later this year and during the winter.

And China is expanding its refining capacity this year and a total of 1.2 million barrels per day of new capacity is due to come on stream later this year. Combined with the domestic production in decline, we expect imports to bounce back once the maintenance season ends later this quarter.

And lastly, there has been further consolidation in the freight markets. And we welcome stronger and well behaved players.

And with that, we would like to open up for questions. Operator?

Thank you. Good morning, Svein and Trygve.

I want to ask couple of questions on the balance sheet because you’ve been very proactive in that regard with the recent refi and the interest rate heading. Obviously, you’re looking at a lot of different avenues for the scrubbers as well.

So, I imagine we’ll get some update on that in the next three months. But just thinking about the next 12 months or so, the convert is the next big repayment.

Have you started discussions on potential refinancing of that, are you looking at other options to deal with the convert in 2019?

John, I think we discussed this very topic on the last call as well. And we still have the sort of the same answer for you that we think there are different avenues that this can play out.

As we stressed last time, it doesn’t take a whole lot of vessel value appreciation in order for this convert to be actually in the money [ph] and we can see conversion. On the other hand, it doesn’t take a very big step up in rates in order for us to generate sufficient funds to take it out.

So, I think we still feel very comfortable that this is very manageable. But of course, we would also, as we get closer, start to explore ways to potentially refinance, that’s alternative as well.

Right. That’s why I asked, just looking for an update, three months down the road without much more improvement.

Second on the interest rate hedging, that’s very interesting transaction. And the way you laid out the economics in the press release, makes it seem very appealing.

22% is meaningful, but there is a lot more floating rate debt out there, especially given maybe some of the other facilities you may be taking on in your future. So, is more interest rate hedging in the cards, is it even possible?

And do you think you can get similar terms to what you’ve already been able to achieve?

It’s really yes and yes on those questions. We -- don’t be surprised if we announce that we will lock in some more.

We believe the economics of this is going to be similar. As a matter of fact, one we just announced was put on less than a week ago.

So, we don’t think the market has moved any material way since then. So, we think we can add on to very similar levels.

Great. And then, the last one is, you mentioned the term super-profits a couple of times now, which is pretty eye-catching.

Just curious as to the assumptions you’re putting into that, is that just based off of carrying current spreads? What do you think the payback period can be on this investment?

And are you already getting enquiry from charterers where you can have some kind of visibility on what a time charter could be for vessel like that versus a vessel that doesn’t go through that conversion?

When we talk about super-profits, the current theoretical spread of $250 per ton, you’re looking at $12,000 a day on average VLCC, on say a standard Middle East, Far East out. And then, this will of course vary a bit when you’re looking at ships with more economic consumption or whether you do longer out so to speak.

But, also, I think there are expectations that this spread could widen. So, of course, that drives even better economics.

So, as such, the payback is certainly well short of one year given these economics. Following the announcement we made on this retrofit, we had a number of incoming calls from customers wanting to secure tonnage with scrubbers.

But, we are mindful of one thing in particular is that we are not so keen on fixing them out at sort of fixed rate money. So, we want to participate in the potential that this equipment has.

And there are opportunities to do that. So, this is things that we are in sort of early discussions on.

And again, you shouldn’t be surprised if you see business develop over the next 12 months in that regard.

So, Jon already touched on the balance sheet, maybe I’ll start off with the topic today and maybe some of the more recent news flow around Chinese tariffs. I know it’s pretty early, but have you been able to get a sense yet of how that might impact trade flows throughout the remainder of Q3?

I know Q3 is obviously typically difficult quarter for the tanker market. But, just curious any impact thus far and how you think it plays out, assuming this -- make the assumption at last through the end of the year, what impacts you are having on the long haul market?

It’s hard to opine on the duration of politics and these discussions between U.S. in China.

But from what we understand, as we stated, we understand that the amount of trade that is currently impacted by this, you’re looking at say 375,000 barrels per day. And if you do that over a month, you’re looking at some 5 to 6 VLCCs that will probably not pick up shale going to China.

But, we have seen increased activity in -- with the Chinese then buying North Sea barrels and also South American barrels to sort of fill the void. So, we’re not so sure that it will negatively impact the market.

But, in general, these things cause disruption, and that tends to be good for our business. But, I think also, what we’ve seen so far in the third quarter is that it’s just slowly, the market is turning on the positive.

And we see some of the things that we’re expecting just to get stronger over time to start to play out, although it’s sort of early days. So, you’re right.

The third quarter is -- you could say surprising compared to the second quarter. But, it also speaks of the balance in the market that it’s not as bad as some people want it to be that we certainly could pick up cargos and look at these sort of levels.

So, maybe a little bit of an impact also of course of positioning and stuff like that but I think our guys on the trading desk have done really well in looking what we have in place so far for the third quarter.

Right. That’s helpful.

So, you’re kind of getting at -- I guess, the point is -- the volumes that are making up, to probably make up the delta there coming from probably North Sea and the Atlantic Basin, so from a ton mile at this point it looks maybe not a wash, but it looks like it could come close to balancing out?

Yes. And then, as we also mentioned, we see South Korea is increasing its purchases of the U.S.

oil and so is India. So, all of this is certainly favorable.

And also long haul business.

That’s helpful. Just one or two on the scrubbers.

You guys roughly half the fleet to be fitted or already fitted. Just curious, you’ve already secured the yard capacity.

How much of that was just due to the scale that could be growing through that yard versus a provider. And do you think your ability to secure that yard availability before the end of the year is -- I guess I’m trying to get a sense of how replicable that will be for smaller owners considering that we’ve seen a lot of momentum towards the installation of scrubbers?

I think, as we mentioned, also, we have become well prepared, we’ve been working on this for quite some time and managed to secure equipment from a leading supplier very timely. And all these conversions will be done at our go to yard where we typically drive up -- get the vast majority of our ships.

So, we have a good relationship. And there’s a huge capacity there.

And we also see that the more experienced and credible suppliers are now basically sold out for 2019. So, if you’re willing to take on more say, technical and operational and execution risk, of course, you can go to smaller and less reputable suppliers.

But, then, if you risk doing this well into 2020 and even later, sort of economic benefit is big time diluted. So, it’s not that attractive.

So, I think, it might be tough to at least replicate a project of this magnitude. But, as we hope that you recognize what we’ve done so far is assume [ph] that we are on top of what’s available to us with respect to potentially fitting additional ships in our feet if we so wanted to.

And if we decide to go ahead, we will most certainly let the market know.

That’s helpful. And just one more on that, and I was actually looking at one of your slides where you break down all your counterparties and it’s basically every major trading out, oil major and it’s like we see in those decks, but thinking about the vetting process.

And after this flurry of activity is done between now and 2020, and we emerge in the other side of it, there kind of [technical difficulty] is for detail around those vettings. Give us sense around where the lines might be drawn for majors, when they are looking the types of scrubbers that are installed, how they were installed, where they were installed, the data they’ll be looking at?

Are you trying to manage it for that post-2020 period where -- there is also some pretty major work on just shifted [ph] that has one installed, the impact on the vetting process and maybe kind of a group of have or have not, as we kind of emerge through 2020. I guess the question is, are you noticing any significant preference developed within your customer base for the type of scrubbers where they are installed or any specific detail?

I think it’s fair to say that for the discussions we’ve had so far with our customers that are interested in using these ships. Of course, they are very also keen on understanding the credibility and the quality of the supplier.

So, I think you cannot just come into the room with any sort of yard or manufacturer equipment with no track record and get business from the really big customers. So, they want to ensure of course that the equipment that they’re going to also use say through a time charter, will operate.

Within the spot market, it’s of course our responsibility to ensure that this equipment works and that we comply with the regulations. Hence, also, our focus ongoing with a highly credible operator has been, in this particular type of business for 40 years and have well over 100 systems in operation.

Hey. Good afternoon.

Just a few clarification questions on the commercial side. I mean, if you split the DHT fleet into three, call them ECO, non- ECO and older.

Could you talk a bit around the trading patterns for those vintages if you’re doing more long-haul on the modern ones? And maybe what kind of TCE differential you are seeing at the prevailing bunker prices?

All our ships are younger than 15 years. So, we don’t really discriminate so to speak, or have to discriminate our ships when it comes to geographical trading perspective.

But, there are of course earnings differences. And in the current environment, the eight ECO ships are the most modern ships are earning some $6,000, $7,000 a day more than say ships in the say 10 to 15-year bracket.

Then we have some ships in the middle that also earnings wise are in the middle.

Let me just add to that. And you may have seen that the ships that we do have on time charter is not ECO ships.

So, the flip side of course then all our ECO ships are in the spot market and that’s not a coincidence. We have found it beneficial to keep them to ourselves and enjoy the fuel savings directly through playing in the spot market.

All right. And maybe as a follow-up, in 2020, which is not far away, you have the ECO benefit and then that hopefully there is a scrubber fit benefit as well.

For forecasting purposes, this quite easily becomes quite a messy metric. How do you suggest we go above this?

The ECO ships of course consume less fuel. So, if you have the scrubber on the ECO ship, the payback or the benefit would be less, but it’s still a meaningful benefit.

Right? So, I think, you easily will have consumption in sort of 11,000, 12,000, 13,000 tons per year, typical for the ECO ships.

And you’re looking at 17,000, 18,000, 19,000 tons for sort of the 10-year old ships. So, that’s the sort of the numbers you might want to use when you look at the spreads and the earnings potential.

I think, spread [ph] that’s determine whether it’s a non-scrubber ECO ship or a scrubber fitted conventional ECO ship that’s going to earn the most TCE. But, what you don’t want to have is really a non-ECO ship without a scrubber in January 2020.

That’s been our approach.

Yes. Hello, guys, and thank you.

You reported you have already paid 60% of your earnings at the $21,000 that implied large improvement from the previous quarter. Can you explain to us where this improvement has come from, if you’ve seen more volume flowing from the Middle East and Saudi Arabia?

And if you have seen any impact from the fact that at least the front part of the curve has turned into contango? If you’ve seen any more delays or floating storage emerging during the last few weeks?

To the last point, I don’t think we’ve seen much of the floating storage. But of course, we have sort of both, retired 33 to 34 ships this year, which is an older end.

And these ships have typically also been willing to engage much lower freights and downward pressure on rates. So, a lot of the ships are gone, although have a fair amount of them out there.

And then, also the overhang of ships has been worked down meaningfully. So, the balance in the fright market is very, very different to just three months ago.

So, owners have been able to move things up, and of course also backing up slightly more cargo. So, we see this sort of moving slowly in the favor, although it’s hard to point out one event that has moved the needle.

Then, to your question on loadings out of Saudi, we see a bigger program for August than what saw in July.

Can you remind us a little bit, this anomaly [ph] because this looks a little bit unusual. Usually, it seems -- my understanding was that during this time of the year Saudi Arabian domestic demand is higher.

So, usually, exports are lower. Why we have witnessed reversal this time?

I there was an OPEC meeting in the end of June when they agreed to or committed admitted to increasing production on exports. So, I think that’s what’s trickling in.

So, you expect that this is a little bit more of a structural, it’s more permanent, it’s not -- it’s because of the OPEC meeting and it’s going to last? And how much do you think that after the seasonality start taking place in September or October, the flows can increase?

And what would that mean for vessel demand and charter rates?

We’re certainly bullish, Fotis. And we think this Saudi increase is not just one month event.

And as we also mentioned, China is expanding its refining capacity and certainly want more feedstock through the fall here. And that’s combined with their production -- own production, decline, as well as coming out maintenance season are favorable aspects.

But, on these to draw down base within from -- on inventory cannot go forever. So, all these are changing.

And gradually all the stars are sort of aligning to make it the more favorable market environment.

Thank you, Svein. One last question, you have a convertible bond that matures next year.

What are your thoughts of refinancing this or paying it in cash through some -- through levering up some of your existing vessels, how shall we think the repayment of this convertible?

Fotis, I think we actually answered that question when Jon Chappell asked at the beginning of the call. So, you’ll see our answer in the transcript.

Thank you. I was just hoping you can give a little more detail or maybe some color around the total CapEx need for the scrubbers next year and perhaps how many just days off-hire it will be to install them?

I have couple of modeling.

Yes. So, the total budget for these 12 retrofits is $55 million.

And we used sort of -- this is 30 days off-hire project. But keep in mind that 3 of the 12 ships already have natural drydock days next year.

So, then the retrofit will be done in connection with that drydock. So, it’s really nine ships.

Then each have say 30 days, off-hire.

Okay. That’s great.

Thank you. And I wanted to ask, you guys obviously were a little earlier than some of your competitors about arranging this.

When you look at kind of the market response and the capacity, do you think there will be any sort of limits on global ability to install scrubbers ahead of 2020, will demand bate supply or is that not really a factor you think?

I think Noah, as we have said before that when January 2020 comes around, the vast majority of tankers are going to show up without the scrubber. Whether it’s going to be 10-90, or 20-80 that percentage, it’s difficult to tell.

We just don’t see it -- possible that we’ll see the majority being fitted over the next 17 months.

A quick question. It seems like you are committed to a dividend of least $0.02 per share.

So, in an increasing earnings environment, do you expect to focus on dividend growth or using 60% of net income to be more aggressive maybe in share repurchases and just maintaining the current $0.02 dividend?

As you referred to, we have a policy of minimum 60% of ordinary net income to be returned to holders, either through dividends or buybacks. And I think that is the answer to the question.

And then, once earnings pick up, of course, there may be more dividends in the combination with buybacks or just dividends. But, that’s too early to tell at this point.

So, we’re certainly committed to dividend.

Excellent. And then, one more question on scrubbers.

So, for the nine that are not kind of scheduled for drydock, would you just pull forward that drydock to just kind of get both the scrubber installed and the drydocking out of the way?

This is very specific and depends on the service cycle of a ship. And in some occasions, it might be possible but in most situations it might not.

So, that is not really a deciding factor. We’ll look at what might be most convenient for each particular ship.

Okay. And then, last question on the scrubbers, one last question for the call.

So, what were your thoughts of installing the 12 and not kind of more and not less I guess on this?

So, we looked at predominantly the older end of our fleet first as they are the ships that consume more fuel, and that’s where the benefit also is the greatest. So, that was sort of the low hanging fruit, so to speak.

But, as we mentioned, we have not excluded shipping more and we know what’s available to us. And if we decide to do more, we’ll certainly let the market know, in due course.

Thank you, gentlemen, for taking my call. And my first question is your preferred shares, did you buy any back at all?

Hello?

Yes. We don’t have any preferred shares outstanding, but we did not buy back any securities during the quarter.

You didn’t buy any back? Okay.

My phone is getting funny here. I’m a little hard at hearing.

So, taking my phone off speaker is difficult for me. Let me try it now.

You speak of the 60% that are earning 21,000 per day on average. Is that a profitable level at this point with expenses where they are?

It’s north of our cash breakeven, but on a profit and loss or income statement basis, it will not be reaching our breakeven for profit. But, importantly, it’s north of the cash flow.

Very good. Well, that keeps us running.

So, anyhow, sold vessels, you spoke of the vessels that are out of service for you. Do you know what the final destination, as far as those ships were concerned?

Are they going into service for somebody else as competitors or what is their status?

Do you mean the 33, 34 ships that has retired this year? They are being sold for demolition or scrapping and they will typically go to India, Pakistan, Bangladesh and be dismantled and the steel will be -- and the equipment will be recycled.

No. I meant the specific vessels that we got rid of that we sold.

Did they get sold and scrapped or did they get sold and put into reuse by some other vendor?

Yes. So, in the last 18 months, we’ve sold six aging VLCCs, three of those were sold for conversion into floating storage fee unit, and three of them were sold for continuous trading.

I see, okay. Very good.

What is the status -- or we’ve talked a lot about the new ships that are being outfitted with scrubbers. What is the status for the rest of our fleet, as far as scrubbers?

Do some of them have scrubbers or what has been the status of that?

So, the two newbuildings being delivered from Hyundai in the third quarter this year, both have scrubbers installed. As of now, we have no scrubbers installed on any of our sailing ships, but we have committed and announced a project whereby we will retrofit 12 of our existing ships with scrubbers during next year.

Okay. The rest of the fleet then was without scrubbers.

How will they service? Will they service at a lower rate, as we have been talking about?

So, on the assumption that no scrubber is installed, they will then consume compliant fuel, which will be more expensive than heavy crude oil. But keep in mind that these ships -- most of these ships are so called ECO ships that lower daily consumption.

So, the economics of the scrubber is different. But, we have not excluded ourselves from doing further projects.

But for now, we’re committed to retrofit 12.

Okay. I noticed in your chart that’s on the website that the debt level, okay, the interest bearing debt level -- and by the way, on the chart, you have the columns, but the columns are not titled.

So, it’s hard to understand exactly which quarter is at such are listed. So, that’s a correction that should be done in the next time around.

But anyhow, the interest bearing debt, in the last one that’s highlighted is up to on $856 million and up from prior quarter I assume of 764. So, the debt is increasing.

If you look at it, with ships going away, our debt per ship then is increasing if you average it across all of them. Are we making significant efforts to keep that debt level per ship even or what did you forecast along those lines?

I think the reason why you see an increase in interest bearing debt is that we have taken delivery of two newbuildings in the quarter. So, that is the reason why it’s increasing.

So, it’s really as simple as that.

It’s increasing, but then if you averaged all debt across all the operating ships, it’s actually lowering then. That’s what you’re saying to me?

We’re paying back for amortizing our mortgage debt every quarter, and this quarter was no different. But, what was different was that we took the delivery of the two newbuilds from the SME, and with that was some additional debt.

So, we are in...

We’re following the schedule and it’s important to us that we repay debt on the depreciating assets.

Okay. That’s all my questions.

Thank you very much for doing a good job.

Thank you.

Good afternoon, Svein and Trygve. First question goes from the $55 million for the 12 scrubbers, 4.6 million per scrubber.

Can you give some more color on what that number includes?

Answer to that is no. But, I think, as a general, I think most people will say that it’s sort of 40-40-20 type of calculation.

So, with scrubber, shipyard, and then engineering and ancillary expenses. So, roughly, that’s what people are in general looking at.

But, no more specifics than that.

Okay. So, I was kind of trying to figure out whether that includes, call it, positioning costs and stuff like that, whether it’s an all-in cost or whether it’s the pure scrubber cost on its own?

So, the expected CapEx in this project is $55 million for these 12 ships, and then, average is 30 days off-hire per ship that has not got natural drydock days.

And earlier on in the Q&A you talked about the potential structure for time charters on the scrubber fitted vessels. And obviously it’s premature and you can’t guarantee or say much about this.

But, I’m just kind of curious. I mean, in light of obviously what we’ve read in many other places, and what you just said as well that there’s limitations on how many scrubbers fitted vessels there will be in the market in 2020.

How you see the, call it, negotiating position in terms of reaping the benefits of call it the fuel advantage? Is that typically 50-50 type of situation, or do you think that’s kind of -- is it possible to give any indications on how -- is that where you’re negotiating or is it more on the focal structure or how that time charter would reflect?

I think firstly, Herman, we have committed to this project on the basis that these ships will operate in the spot market, because we believe again it could be very good economic benefit for DHT shareholders. That being said, we are not strangers to do time charters, but it’s important for us that we participate in the upside on these scrubbers.

So, it will certainly -- if you are in certain negotiations, will be a factor of where is the base rate, what type of calculator are you using for the profit sharing, and so, a lot of details. And this is very hard to give you a particular steer on that.

But, we have seen people there stay in the kind of -- where they look at the 50-50 share on actual earnings above a certain base rate. So, that is at least what is being discussed so far.

But, there are other ways to skin this cat as well.

Okay. And then, by what time do you -- I mean obviously you have quite an extensive part of your fixed portfolio expiring in the early part of 2019.

What time do you expect to do more time charter or is that just kind of take a wait and see approach to what happens in the market?

I think our general approach to time charter is more a factor of where rates are. And the five starters we entered into at the end of last year, they are only of 12 months duration.

They had a base rate at about our cash breakeven with a profit sharing element on top. And we were not really there to entertain longer term charters at rate that were available at that time.

And we do think it’s sort of timely that these ships come off time charter in a too distant future. And for our long-term opportunities, once rates meaningfully appreciate, we’ll look into that.

But we’re not going to make a long-term business that is loss-making, so.

So, we’ll then just say thanks to everyone for participating in the call, and have a good day.