Management’s Review

Friday, November 8, 2019, we rang the bell at the Oslo Stock Exchange, and Hafnia was cleared for departure as the world’s leading listed product tanker company.

Prior to the listing, we had reached a great goal in the merging of “Hafnia Tankers” and “BW Tankers”, combining strengths and values between two well-established organisations into one united product tanker company.

Our mission remains to be the first choice as trusted partner for the businesses, shareholders and communities we serve. With the largest owned and commercially managed fleet comprising more than 180 vessels, Hafnia is uniquely positioned for the future of responsible and transparent maritime energy transportation to world markets.

Following the merger, we have focused on driving commercial and cost synergies, developing our core cultural values and evaluating processes for improved customer services, relations with oil companies, and strategizing how to benefit from the company’s large-scale operations. All these elements have led to improvement of the day-to-day management, constant operational development, results and internal knowledge sharing at Hafnia.

We are pleased to see that the hard work has paid off. The results and achievements of 2019 are highly satisfactory and provide a promising platform for the future. This is the outcome of great perseverance and craftsmanship throughout the organisation.

The net profit for 2019 was USD 71.7 million – hopefully one of many profitable years to come. Below we would like to share an overview of some of the milestone initiatives from 2019.

The results and achievements of 2019 are satisfactory, especially in the light of challenging markets, and provide a promising platform for the future

Merger, Private Placement and Listing

Years of strengthening the business and preparing for the capital markets culminated in the successful listing. This is the beginning of an exciting new chapter in the company’s history.

The private placement was successfully completed in November, raising approximately USD 230 million in primary and secondary proceeds, with gross primary proceeds of USD 75 million which was used to finance the equity portion of two MR vessels, repayment of an unsecured USD 34,5 million loan from BW Group and remaining proceeds for general working capital purposes.


Strong Balance Sheet

We have maintained excellent financial performance and results, and our balance sheet remains strong. In September 2019, Hafnia signed a USD 473 million senior secured term loan and revolving credit facility to refinance two existing USD 360 million and USD 236 million facilities. This refinancing was raised from ten banks in Europe and Asia.


Full Compliance with IMO 2020 Regulations

We achieved full compliance with the new IMO sulphur regulations, with the fleet converting to using low sulphur fuel oil as of December 2019. We installed scrubbers on three LR2 newbuilds delivered in 2019 (including time-chartered in vessels); they are all chartered out on long-term contracts, but we believe that switching to low sulphur fuel oil is the most sustainable way to go.

We achieved full compliance with the new IMO sulphur regulations

Environmental, Social & Governance (ESG)

The United Nations has called climate change the defining issue of our time and urged world leaders to recognise that humanity is at a critical moment. Without committed action today, adapting to these impacts in the future will be more difficult and costly. Against this backdrop, Hafnia takes a front-row seat in

global efforts to combat climate change as a leading shipping company firmly committed to providing safe, sustainable and efficient hydrocarbon transportation solutions. This is how we are contributing towards the shipping industry’s efforts to reduce our environmental impact and we are, a member of the Getting to Zero Coalition. Furthermore, we are committed to diversification of the maritime workforce and are a member of the Danish charter for more women in shipping.

Key figures

The development, implementation and maintenance of good and well-functioning governance policies and practices are important processes and focus areas for Hafnia.


Core Cultural Values

We believe in leading with purpose and guiding with values. In 2019, we launched international Culture & Values workshops throughout our organisation to evaluate our shared values and unlock new opportunities for growth. Our vision is “Best on Water” and our values are encapsulated by the letters “CARE” – Collaborative, Ambitious, Reliable, and Enduring.

The world’s leading listed product tanker company

Establishment of “Innovation & Change” and “People, Culture & Strategy” teams

We have established two new business units: People, Culture & Strategy and Innovation & Change, allowing us to accelerate new ideas to launch. We aim to create external partnerships and start-ups to solve challenges, and create a culture of innovation through training and change initiatives.


Newbuild Programs

We have completed our newbuild programme in 2019, and with 15 new vessels delivered in 2019 we ended the year with a total of 81 owned vessels. In 2020 we will take delivery of two remaining LR1 newbuilds through Vista Shipping Ltd., a joint venture between Hafnia and CSSC Shipping.


Looking ahead

In 2020, Hafnia will continue the transition towards generating higher returns on equity, focusing further on commercial and cost synergies as well as ensuring flexible and trustworthy solutions to our customers and partners. The global oil demand growth is currently projected to grow by 1.3% in both 2020 and 2021. However, the recent outbreak of the novel coronavirus “COVID-19” in China could have a significant negative impact, and we follow the development closely.

As of 15 February 2020, the coverage for the first quarter of 2020 was 61% at USD 22,123/day. For the individual segments, the coverage was 99% at USD 23,900/day for LR2, 58% at USD 22,096/day for LR1, 59% at USD 20,739/day for MR and 57% at USD 25,960/day for Handy.

Looking ahead, Hafnia is well-positioned to deliver great results in 2020, and we strive to be recognised as a leader in, and the preferred provider of, oil products, maritime transportation and related services and solutions.

Welcome to Hafnia!

Mikael Skov, CEO


Key figures

Q1 2019
USD million
Q2 2019
USD million
Q3 2019
USD million
Q4 2019
USD million
YTD 2019
USD million
Income statement
Operating revenue 214.1 200.7 188.5 224.6 827.9
TCE income 132.6 118.0 106.7 157.1 514.4
EBITDA 74.1 58.9 50.0 94.8 277.8
Operating profit 44.9 27.7 15.4 57.6 145.6
Capitalised financing fees written off (9.3) (9.3)
Financial items (17.0) (16.3) (16.2) (14.9) (64.4)
Share of profit from associates 0.6 0.3 0.9
Profit/(loss) before tax 27.9 12.0 (10.1) 42.9 72.7
Net profit/(loss) for the period 27.9 12.0 (10.6) 42.4 71.7
Balance sheet
Total non-current assets 2,184.9 2,194.8 2,249.9 2,346.4 2,346.4
Total assets 2,450.1 2,482.7 2,623.9 2,681.3 2,681.3
Total liabilities 1,444.6 1,468.8 1,621.2 1,562.8 1,562.8
Total equity 1,005.5 1,013.9 2,418.0 1,118.5 1,118.5
Total invested capital 2,302.8 2,349.4 2,418.0 2,442.8 2329.9
Cash and cash equivalents 75.2 100.9 122.3 91.6 91.6
Key financial figures
Gross margins:
TCE 61.9% 58.8% 56.6% 70.0% 61.2%
EBITDA 34.6% 29.3% 26.5% 42.2% 33.6%
Operating profit 21.0% 13.8% 8.2% 25.7% 17.6%
Return on Equity (RoE) (p.a.) 11.2% 4.8% -4.3% 16.2% 6.8%
Return on Invested Capital (p.a.) 7.8% 4.7% 2.6% 9.4% 6.2%
Equity ratio 41.0% 40.8% 38.2% 41.7% 41.7%
For the 3 months ended 30 september 2019 LR2 LR1 MR Handy Total
No. of vessels on water at the end of the period1 6 30 46 13 95
Total operating days5 451 2,562 4,095 1,207 8,315
Total calendar days (excluding TC-in) 389 2,527 3,725 1,209 7,851
TCE (USD per operating day)2 24,723 20,560 17,309 18,588 18,898
OPEX (USD per calendar day)3 8,177 6,289 7,069 6,127 6,728
G&A (USD per operating day)4 1,031

1 Excluding three LR1s and three LR1 newbuilds owned through 50% ownership in the Vista Shipping Limited.
2 TCE represents gross TCE income after adding back pool commissions.
3 OPEN includes vessel running costs and technical management fees.
4 G&A adjusted for cost incurred in managing external vessels.
5 Total operating days include operating days for vessels that are time chartered in. Total operating days for the LR2 segment are greater than calender days due to the finalisation of estimated offhire days in previous quarter.

Safe harbour statement

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