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 $11.7 million TCE adjustment from IFRS 15 load-to-discharge treatment, and Q4 EBITDA was $234.5 million; full-year EBITDA was just over $1 billion. Q4 average TCE per day was $30,732 versus $28,954 in Q3, and full-year average TCE was $32,326 per day. OpEx was $7,764 per day in Q4 versus $8,160 in Q3. Net LTV improved to 26.3% from 27.4% in the quarter, cash was $142 million, and total liquidity was over $460 million including $321 million of undrawn facilities. The quarterly dividend was $0.2431 per share, or about NOK 2.57, totaling approximately $123.5 million at a 70% payout ratio. For 2024, management said 80% of Q1 earning days were covered at an average of $37,668 per day as of 29 February, and 30% of full-year 2024 earning days were covered at $33,419 per day.

Mikael Skov emphasized that Hafnia is in a strong strategic position with a modern, relatively young fleet and a history of disciplined growth through acquisitions and joint ventures. He highlighted the new Panamax Pool with Mercuria, the Big Hill methanol/sustainable fuel venture, and biofuel bunkering as examples of continued strategic and ESG-focused execution. In Q&A, he said the company does not intend to build up unnecessary cash and will continue returning capital to shareholders, while keeping flexibility to adjust chartering and asset sales based on market conditions.

Perry Van Echtelt framed the quarter as another strong financial period despite supply-chain and geopolitical disruptions. He cited full-year net profit of $793.3 million, Q4 net profit of $176.4 million, Q4 EBITDA of $234.5 million, full-year EBITDA just over $1 billion, and a dividend of $0.2431 per share with a 70% payout ratio. He also pointed to balance-sheet improvement, with net LTV down to 26.3%, cash of $142 million, total liquidity above $460 million, and about 75% of loans hedged at a weighted average base rate of 1.62. He said the hedging strategy has helped protect financing costs in a high-rate environment.

Analysts focused on the impact of Red Sea rerouting on LR rates, refinery turnarounds, and what Hafnia will do as leverage approaches its dividend-policy threshold. Management said the weak LR market partly reflected the recent freight spike that closed some arbitrage and kept diesel more local in the East, and they do not think the full Red Sea demand effect has yet been seen. On capital allocation, Mikael Skov said Hafnia has no intention of accumulating cash and will keep returning capital to shareholders, while remaining opportunistic on time charters, hedges, and selling older ships if prices are right.