Hafnia Limited Q4 FY2025 earnings call

Fleet Renewal

• Divested older vessels at attractive prices, sold two MR vessels and committed to sell more, took delivery of the fourth dual-fuel IMO2 MR in Ecomar joint venture.

Investment Attributes

• Global leader in product and chemical tanker space, fleet average age below industry average, net asset value about $3.5 billion, net LTV at 24.9%.

Dividend Policy

• Paid dividends for 16 consecutive quarters, returned 88.1% of net profit to shareholders in 2025 including share buybacks.

Industry Review

• Product tanker market in Q4 2025: supported by growth in refined and crude oil exports, clean and dirty volumes on the water, limited clean product tanker supply growth, impact of vessel sanctions, and inventory levels as important indicators.

Financial Developments

• Q4 2025 adjusted EBITDA $149.7 million, net profit $109.7 million. Net LTV increased to 24.9% due to investment in TORM, strong liquidity profile. TCE income in Q4 $259 million, average TCE $27,346 per day. Secured 76% of Q1 earning days at average rate above breakeven, 33% of 2026 earning days covered at average rate.

In Q4 2025, Hafnir delivered its strongest quarter with a net profit of $109.7 million. For the full year, net profit was $339.7 million. The product anchor market started softer but strengthened in the second half and remained seasonally firm in Q4. The fleet had 123 vessels with an average age of 9.7 years. Fee-based businesses contributed $6.9 million in fee income for the full year. Third-party vessels across eight pools contributed roughly $30 million in earnings for 2025. Dividends for Q4 were $87.7 million (17.62 cents per share), and for the full year, total dividends were $271.7 million (55.57 cents per share) with an 80% payout ratio for Q4.

Q2 2026 Outlook

• Remain optimistic for Q2 2026.

2026 Earnings

• 2026 points towards another year of strong earnings based on Q1 and full year covered rates and analyst consensus.

Vessel Sanctions

• Sanctioning of tankers reduces available fleet supply, but sanctioned tonnage unlikely to return to mainstream trade even if sanctions lifted. Shadow fleet still trading with flag hopping, significant proportion of old tonnage with scrapping potential.

Dry Docking

• Scheduled dry dockings in Q4 2025 impacted results with off-hire days higher than expected due to unscheduled repairs, but expected to decline in 2026.

Q: Discuss the NR2 slash crude Afromax spread and LRQs moving into dirty trades.

A: Spread causes more ships to enter Afromax trade, transition ongoing with lowest count of clean trading LR2s in years making Middle East market tight.

Q: View on seasonality shifts.

A: Geopolitical unrest and various factors could lead to stronger than normal second quarter.

Q: Effects of EU regulations on MRs.

A: More legit barrels on mainstream fleet, Europe and Mediterranean MRs weakest area.

Q: Sign of increased scrapping of sanctioned vessels.

A: Indian seems to accept scrapping of sanctioned tonnage but few so far.

Q: Commercial performance vs peers.

A: Comparably close, tie with TORM.

Q: Status of TORM shareholding.

A: Shareholding looks good on paper, sees consolidation benefits with synergies and multiple expansions.

Q: Comment on commercial performance vs peers like TORM and MRs.

A: Comparable, close run up with outperformance in some segments.

Q: Elaborate on TORM shareholding status.

A: Shareholding is good investment, sees consolidation benefits with synergies and multiple expansions