HAFN — Hafnia Limited

Hafnia Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Q4 2025 Net Profit: $109.7 million, marking the strongest quarter of the year.
• Full Year 2025 Net Profit: $339.7 million, with a return on equity of 14.8% and return on invested capital of 11.2%.
• Adjusted EBITDA for Q4: $149.7 million.
• Total Cash Dividend for Q4: $87.7 million, translating to $0.1762 per share, maintaining an 80% payout ratio.
• Total Dividends for 2025: $271.7 million, or $0.5557 per share, yielding approximately 10%.
• Net Asset Value: Approximately $3.5 billion, equating to $7.04 per share.
• Net Loan-to-Value (LTV) Ratio: Increased to 24.9% from 20.5% due to the investment in Torm.

2. Strategic Updates and Business Highlights

• Fleet Management: Continued divestment of older vessels; sold 2 MR vessels and committed to sell additional vessels.
• Investment in Torm: Acquired 13.97% of Torm's shares, exploring potential consolidation for enhanced market presence and operational synergies.
• Fleet Composition: At year-end, Hafnia operated 123 vessels with an average age of 9.7 years, below the industry average.
• Sustainability Initiatives: Commitment to high operational and environmental standards, including investments in technology to enhance operational efficiency.

3. Forward Guidance and Outlook

• Market Outlook: Anticipation of continued strong earnings momentum into Q1 2026, with 76% of earning days secured at an average rate of $29,979 per day.
• Freight Market Recovery: Expected improvement in utilization and earnings due to reduced dry docking days and a recovering freight market.
• Long-term Contracts: 33% of earning days for 2026 already secured at an average rate of $27,972 per day.

4. Bad News, Challenges, or Points of Concern

• Dry Docking Impact: Q4 results affected by higher-than-expected off-hire days due to scheduled and unscheduled repairs, with ongoing dry docking expected in 2026.
• Market Competition: Increased fleet growth from newbuild deliveries in 2025, which may cap freight rate upside despite strong demand fundamentals.
• Geopolitical Risks: Ongoing geopolitical tensions could impact trade flows and market dynamics, particularly in the crude and refined product sectors.

5. Notable Q&A Insights

• LR2/Aframax Spread: Analysts questioned the $25,000 per day premium for Aframaxes over LR2s, with management confirming a shift of LR2s into dirty trades due to market conditions.
• Regulatory Impact: Discussion on EU regulations affecting MR trades, with management noting that European markets remain weaker due to reduced Russian crude exports.
• Scrapping of Sanctioned Vessels: Limited scrapping of sanctioned vessels has begun, but significant action is still awaited.
• Commercial Performance: Hafnia's performance was noted to be competitive with peers like Torm, with a close comparison in earnings across segments.

This summary encapsulates Hafnia's financial performance, strategic initiatives, market outlook, and challenges faced during Q4 2025, along with key insights from the Q&A session.