HAFN — Hafnia Limited

Hafnia Q4 2025 Earnings Call Summary

1. Key Financial Results and Metrics

• Q4 2025 Net Profit: $109.7 million, the strongest quarter of the year.
• Full Year 2025 Net Profit: $339.7 million, maintaining solid performance.
• Adjusted EBITDA for Q4: $149.7 million.
• Return on Equity: 14.8%; Return on Invested Capital: 11.2%.
• Total Dividends for Q4: $87.7 million ($0.1762 per share), resulting in an 80% payout ratio.
• Total Dividends for Full Year 2025: $271.7 million ($0.5557 per share), yielding approximately 10%.
• Net Asset Value: Approximately $3.5 billion ($7.04 per share).
• Net Loan-to-Value (LTV) Ratio: Increased to 24.9% from 20.5% in Q3, primarily due to the investment in Torm.

2. Strategic Updates and Business Highlights

• Continued divestment of older vessels as part of a fleet renewal strategy; sold multiple MR vessels and committed to further sales.
• Acquisition of a 13.97% stake in Torm, with ongoing discussions about potential consolidation to enhance market presence and operational synergies.
• Fleet composition: 123 vessels with an average age of 9.7 years, below the industry average of 14.1 years.
• Strong operational cash flow generation with TCE income of $259 million and an average TCE rate of $27,346 per day.

3. Forward Guidance and Outlook

• Positive outlook for Q1 2026 with 76% of earning days secured at an average rate of $29,979 per day, indicating strong earnings leverage.
• Anticipation of continued strong market conditions into 2026, despite a significant number of newbuild deliveries.
• Expectation of improved utilization and earnings momentum as dry docking activities decrease.

4. Bad News, Challenges, or Points of Concern

• The product tanker market faced a softer start in 2025, with limited scrapping of older vessels contributing to fleet growth and capping upside in freight rates.
• Increased number of scheduled dry dockings in 2025, leading to approximately 550 off-hire days, which impacted operational performance.
• Concerns over geopolitical factors affecting market dynamics, particularly regarding sanctions and their impact on trade flows.

5. Notable Q&A Insights

• Discussion on the LR2/Aframax spread indicated a continued transition of LR2 vessels into dirty trades due to strong premiums.
• Insights into the impact of EU regulations on MR vessels, noting a lag in European demand and the shift of Turkish refined products away from Europe.
• Acknowledgment of limited scrapping of sanctioned vessels, with potential for future scrapping as regulations evolve.
• Emphasis on the competitive positioning of Hafnia compared to peers, with a strong performance noted against Torm and other competitors.

Overall, Hafnia demonstrated strong financial performance in Q4 2025, with strategic initiatives aimed at enhancing market position and operational efficiency, despite facing challenges related to market dynamics and geopolitical factors. The outlook for 2026 remains positive, supported by secured earnings and a recovering freight market.