Hafnia Limited(HAFN) - 2025 Q3 - Earnings Call Transcript

Financial Data and Key Metrics Changes - In Q3, Hafnia reported TCE income of $247 million, with adjusted EBITDA of $150.5 million, leading to a net profit of $91.5 million or $18 per share [13][14] - The company has maintained a dividend payout ratio of 80% of net profit, resulting in a dividend payment of $73.2 million or $14.7 per share for the quarter [14][9] - The average age of the owned fleet is 9.6 years, with a total of 126 vessels [5][6] Business Line Data and Key Metrics Changes - Hafnia operates in the product tanker and chemical markets, with a diversified fleet including 117 owned vessels and nine long-term time-chartered vessels [5][6] - The company has seen a strong market in Q3, contrary to typical seasonal trends, due to increased ton miles and tighter supply from sanctioned vessels [13] Market Data and Key Metrics Changes - The company has booked 71% of its bookings for Q4 as of mid-November, indicating an improvement in rates, with bookings around $26,040-$25,600 [20] - The market dynamics have shifted, with a significant reduction in fleet addition expected in 2025, leading to a tighter tonnage situation [35][36] Company Strategy and Development Direction - Hafnia is focused on strategic growth through acquisitions, joint ventures, and fleet modernization, including a recent acquisition of Chemical Tankers, Inc. and a joint venture with Cargill for bunkering services [10][11][7] - The company aims to maintain a low-cost operation while ensuring strong shareholder distributions, with a clear dividend policy linked to the strength of its balance sheet [7][9] Management's Comments on Operating Environment and Future Outlook - Management noted that the geopolitical environment, including the reopening of the Red Sea and the impact of Russian oil sanctions, presents both challenges and opportunities for the company [26][30] - The outlook for the winter market appears strong, driven by refinery closures in Europe and increased demand from the U.S. [37][38] Other Important Information - Hafnia has sold four older MR vessels as part of its fleet modernization strategy, with three recognized in Q4 [14] - The company is actively monitoring the situation in Venezuela, which has seen a recovery in export volumes [33] Q&A Session Summary Question: What is the status of the TORM share purchase? - Management confirmed that the transaction is pending the appointment of a new independent board chair for TORM, which is the last outstanding condition [16][19] Question: How does the company view the impact of the Red Sea reopening? - Management believes that while there may be initial negative sentiment, the actual trading dynamics suggest a return to a relatively normal market without significant impact [28][29] Question: Why has the order book fallen in Q3? - Management indicated that the decline in the order book is not due to increased scrapping but rather a shift in market dynamics with many vessels moving into dirty trades [39][40] Question: What is the company's strategy regarding fleet renewal? - The company is focusing on extending the life of existing vessels rather than ordering new builds at high prices, while remaining open to opportunities for fleet purchases or M&A [41][42]