Hafnia Ltd. Q1 FY2025 earnings call

• Despite a challenging market, Hafnia delivered a net profit of $63.2 million.
• TCE income was $218.8 million despite ~500 off-hire days due to drydocking/repairs.
• Adjacent businesses (pool management, bunkering) contributed $7.9 million.
• Hafnia is a global leader in product/chemical tanker market with over 200 vessels in 8 pools.
• Seascale Energy JV with Cargill to start ops in May.
• NAV of fleet was ~$3.4 billion, NAV per share ~$6.96/NOK73.03.
• Average vessel age 9.3 years vs global avg 14 years.
• Dividend payout ratio 80% for Q1, total dividend $50.6 million, effective payout ratio 123% including share buyback.

In the first quarter of 2025, Hafnia achieved a TCE income of $218.8 million. Additionally, the commercial pool management and bunkering businesses contributed $7.9 million to the overall results. The TCE income was the primary segment, with the adjacent businesses adding to the financial performance.

• As of 1st May, 57% of Q2 earning days covered at $24,839/day; Q2-Q4: 27% covered at $24,902/day.
• Projected net profits for 2025 in the range of $320 to $340 million based on strong market fundamentals.

• Geopolitical issues like USTR proposed port fee targeting Chinese-built vessels/operators.
• OFAC sanctions impact on crude tankers, potential spillover to product tanker market.
• Dark fleet vessels engaged in Russian trade, potential EU/OFAC sanctions.
• Uncertainty around full implications of USTR port fee proposal.

Q: Omar Nokta asked about LR2s, their strong performance, and fleet strategy.

A: Søren Winther responded that LR2s are traded in Eastern hemisphere CPP segments, $53,000/week is due to strong front haul legs and Middle East refinery turnaround. Mikael Skov mentioned fleet focus on harvesting returns, selling older ships, and open to attractive deals but not active in buying assets short-term.

Q: Frode Mørkedal asked about buybacks and dividend focus.

A: Mikael Skov said dividend policy maintained, share buybacks on ad hoc basis, and they aim for clarity with investors.

Q: Kristoffer Barth Skeie asked about OPEC+ reversal impact and pool earnings on handy.

A: Søren Winther said OPEC+ increase is positive for crude tankers, leading to LR2s moving to dirty trade, and on handy, they're seeing similar to MRCO in low 20s in confined markets