Hafnia Limited

Hafnia reported Q4 2023 net profit of $176.4 million and full-year net profit of $793.3 million. Q4 TCE income was $330 million, with a negative TCE adjustment of $11.7 million; Q4 EBITDA was $234.5 million and full-year EBITDA was just over $1 billion. Full-year average TCE was $32,326/day, while Q4 average TCE was $30,732/day versus $28,954/day in Q3. Net LTV improved to 26.3% from 27.4% in the quarter, cash ended at $142 million, and total liquidity was above $460 million including $321 million of undrawn facilities. For guidance/forward cover, as of 29 February 2024, 80% of Q1 2024 earning days were covered at an average of $37,668/day, and 30% of 2024 earning days were covered at $33,419/day. Management described 2024 as likely to be “another strong year” based on market fundamentals and its high spot exposure.

Mikael Skov framed Hafnia as a disciplined, strategically growing tanker platform with a modern fleet and an active capital-allocation approach. He highlighted fleet renewal, selective acquisitions and JVs, and new initiatives such as the Panamax Pool with Mercuria and the Big Hill project for low-CI blue methanol and sustainable aviation fuel, though the latter is still subject to FID. In Q&A, he stressed that the company does not intend to build cash unnecessarily, is not rushing into expensive vessel purchases, and will continue returning capital to shareholders while remaining flexible on spot versus time charter exposure.

Perry Van Echtelt emphasized the strength of the 2023 financials despite supply-chain disruption and geopolitics, noting record full-year net profit of $793.3 million and a payout of more than $500 million from 2023 earnings. He said net LTV fell to 26.3% from 27.4% due to accelerated debt repayment and improved asset prices, and that around 75% of loans were hedged at a weighted average base rate of 1.62, helping control financing costs. He also cited $142 million of cash, more than $460 million of total liquidity, $8.8 million from the commercial pool and bunkering business in Q4, and a $123.5 million quarterly dividend at a 70% payout ratio.

Analysts focused on why LR1/LR2 rates had softened despite Red Sea rerouting, and management said the early freight spike likely closed some arbitrage, keeping diesel more local in the East and meaning the full demand effect of the disruption has not yet been felt. On refinery turnarounds, Jens Christophersen said runs are expected to increase in the coming months, especially from the US Gulf. Another question centered on the dividend policy and what happens as LTV approaches the 20% threshold; Mikael Skov said Hafnia does not want to accumulate cash and will continue prioritizing shareholder distributions, while remaining open to charters, hedging, and opportunistic asset sales if pricing is right.