Hafnia Limited · OSL:HAFNI
Hafnia — H1 2023 Earnings Presentation
64 slides from Hafnia's earnings presentation, Aug 25, 2023
Slide 1: Condensed Consolidated Interim Financial Information Q2 and H1 2023
Hafnia Limited Condensed Consolidated Interim Financial Information Q2 and H1 2023 1
Slide 2: CEO's Statement
“Despite high volatility in the product tanker market in the second quarter, I am pleased to announce that Hafnia has delivered another strong result in Q2. We achieved a net profit of USD 213.3 million, bringing our net profit in the first six months of 2023 to USD 469.9 million. This notably prope
Slide 3: Summary
Summary S U M M AR Y CEO’s Statement 02 Notes Highlights – Q2 and H1 2023 04 Note 1: General information 27 Safe Harbour Statement 07 Note 2: Basis of preparation 28 Key figures 08 Note 3: Changes in accounting policies 29 Cash and cash flows 10 Note 4: Significant accounting policies 30 Dividend po
Slide 4: Highlights – Q2 and H1 2023
H I G H L I GH T S – Q 2 A N D H 1 2 0 2 3 Highlights – Q2 and H1 2023 Financial – Q2 Financial – H1 Time Charter Equivalent (TCE) earnings for Hafnia Limited (the Time Charter Equivalent (TCE) earnings for Hafnia Limited (the "Company" "Company" or "Hafnia", together with its subsidiaries, the "Gro
Slide 5: Market
Market H I G H L I GH T S – Q 2 A N D H 1 2 0 2 3 C O N T I N U E D Global oil markets have gradually recalibrated, after a turbulent year Refinery margins today supersede 2022 levels, following a spike in gasoline and upended by Russia’s invasion of Ukraine. Market inefficiencies have diesel cracks
Slide 6: Highlights – Fleet and dividend
Fleet Hafnia will pay a quarterly dividend of USD 0.2528 per share. Record date H I G HLIGHT S – Q 2 A N D H 1 2 0 23 C ON T IN U E D will be 1 September 2023 with ex. Dividend date of 31 August 2023 and At the end of the quarter, Hafnia had 113 owned vessels1 and 15 payment on 12 September 2023. Pl
Slide 7: Safe Harbour Statement
S A F E H A R B O UR S T A T E M E N T Safe Harbour Statement Disclaimer regarding forward-looking statements in the interim report Prospective investors in Hafnia are cautioned that Forward-looking This interim report includes “Forward-looking Statements” that reflect Statements are not guarantees
Slide 8: Key figures
K E Y F I G U RE S Key figures USD million Q1 2023 Q2 2023 H1 2023 Income Statement Operating revenue 597.1 482.0 1,079.1 TCE income 377.2 349.3 726.5 EBITDA 296.0 261.6 557.6 Operating profit (EBIT) 280.7 229.5 510.2 Financial items (28.0) (19.8) (47.8) Share of profit from associate and joint vent
Slide 9: Key figures continued
For the 3 months ended 30 June 2023 LR2 LR1 MR5 Handy6 Specialized Total K E Y F I G U RE S C ON T IN U E D Vessels on water at the end of the period1 6 28 59 24 1 118 Total operating days 2 546 2,517 5,144 2,180 57 10,444 Total calendar days (excluding TC-in) 546 2,248 4,342 2,184 - 9,320 TCE (USD
Slide 10: Cash and cash flows
C A SH A N D C ASH F L OWS Cash and cash flows Cash and cash equivalents amounted to USD 241.5 million as of 30 June 2023 (30 June 2022: USD 87.5 million). Operating activities generated a net cash inflow of USD 172.3 million in Q2 2023 (Q2 2022: net cash inflow of USD 126.4 million). Cash flows fro
Slide 11: Dividend policy
Dividend policy Hafnia will target a quarterly payout ratio of net profit, adjusted for D I V IDEN D extraordinary items, of: ▪ 50% payout of net profit if Net loan-to-value is above 40%, ▪ 60% payout of net profit if Net loan-to-value is above 30% but equal to or below 40%, ▪ 70% payout of net prof
Slide 12: Coverage of earning days
C O V E R A G E O F E A R N I NG D A Y S Coverage of earning days As of 23 August 2023, 78% of the total earning days in Q3 2023 were covered at USD 27,616 per day. The table on the next page shows the figures for Q3 2023, Q3 to Q4 2023 and the full year of 2024. 12
Slide 13: Coverage of earning days continued
C O V E R A G E O F E A R N I NG D A Y S C O N T I N U E D Fleet overview Q3 2023 Q3 to Q4 2023 2024 Owned ships, # of vessels LR2 6.0 6.0 6.0 LR1 10.0 10.0 10.0 MR2 43.0 43.0 43.0 Handy3 6.0 6.0 6.0 Specialized - - - Total 65.0 65.0 65.0 Charter-in and leaseback ships, # of vessels LR2 - - - LR1 19
Slide 14: Coverage of earning days continued
C O V E R A G E O F E A R N I NG D A Y S C O N T I N U E D Q3 2023 Q3 to Q4 2023 2024 Total ships, # of vessels LR2 8.2 8.6 9.8 LR1 35.0 35.0 32.9 MR1 61.0 60.1 56.0 Handy2 24.0 24.0 24.0 Specialized 1.0 0.6 - Total 129.2 128.3 122.7 Covered, % LR2 90% 64% 39% LR1 67% 35% - MR1 79% 49% 16% Handy2 85
Slide 15: Tanker segment results
T A N K E R S E G M E N T R E S U LT S Tanker segment results LR2 Q3 2022 Q4 2022 Q1 2023 Q2 2023 LR1 Q3 2022 Q4 2022 Q1 2023 Q2 2023 Operating days (owned) 552 552 540 546 Operating days (owned) 2,667 2,737 2,389 2,154 Operating days (TC - in) - - - - Operating days (TC - in) 438 367 357 363 TCE 35
Slide 16: Tanker segment results continued
T A N K E R S E G M E N T R E S U LT S Chemical - Stainless Q3 2022 Q4 2022 Q1 2023 Q2 2023 Specialized Q3 2022 Q4 2022 Q1 2023 Q2 2023 Operating days (owned) 317 35 - - Operating days (owned) - - - - Operating days (TC - in) - - - - Operating days (TC - in) - - - 57 TCE TCE 21,699 21,243 - - - - -
Slide 17: Risk factors
R I S K F A C TORS Risk factors The Group’s results are largely dependent on the worldwide market for transportation of refined oil products. Market conditions for shipping activities are typically volatile and, as a consequence, the results may vary considerably from year to year. The market in bro
Slide 18: Condensed Consolidated Interim Financial Information
Condensed Consolidated Interim Financial Information (“Interim Financial Information”) for the period from 1 January 2023 to 30 June 2023
Slide 19: Responsibility statement
RE SP ONSIBILITY STATE ME NT Responsibility statement We confirm, to the best of our knowledge, that the condensed set of consolidated interim financial information (‘Interim Financial information’) for the period from 1 January to 30 June 2023 has been prepared in accordance with IAS 34 – Interim F
Slide 20: Condensed consolidated interim statement of comprehensive income
Condensed consolidated interim statement of comprehensive income C O N D E NS E D C O N S O L I D A T E D I N T E R I M S T A T E M E N T O F C O M P R E H E NS I V E I N C O M E For the 3 months ended For the 3 months ended For the 6 months ended For the 6 months ended 30 June 2023 30 June 2022 30
Slide 21: Statement of comprehensive income continued
C O N D E NS E D C O N S O L I D A T E D I N T E R I M S T A T E M E N T O F C O M P R E H E NS I V E I N C O M E C O N T I N U E D For the 3 months For the 3 months ended For the 6 months ended For the 6 months ended Note ended 30 June 2023 30 June 2022 30 June 2023 30 June 2022 USD’000 USD’000 USD
Slide 22: Condensed consolidated balance sheet
Condensed consolidated balance sheet As at 30 June 2023 USD’000 As at 31 December 2022 USD’000 Share capital 5,069 5,035 C O N D E NS E D C O N S O L I D A T E D B A L A N CE S H E E T As at 30 As at 31 June 2023 December 2022 Share premium 1,044,849 1,023,996 USD’000 USD’000 Contributed surplus 537
Slide 23: Condensed consolidated interim statement of changes in equity
C O N D E NS E D C O N S O L I D A T E D I N T E R I M S T A T E M E N T O F C H A N GE S I N E Q U I T Y Condensed consolidated interim statement of changes in equity Share-based Share Share Contributed Translation Hedging Treasury Capital payment Retained Capital Premium Surplus reserve reserve sh
Slide 24: Condensed consolidated statement of cash flows
Condensed consolidated statement of cash flows For the 3 months ended 30 For the 3 months ended 30 For the 6 months ended 30 For the 6 months ended 30 C O N D E N S E D C O N SO L I D A T E D S T A T E M E NT O F C A S H F L O W S June 2023 June 2022 June 2023 June 2022 USD’000 USD’000 USD’000 USD’0
Slide 25: Statement of cash flows continued
For the 3 months ended 30 For the 3 months ended 30 For the 6 months ended 30 For the 6 months ended 30 June 2023 June 2022 June 2023 June 2022 USD’000 USD’000 USD’000 USD’000 Loan to pool participants - (5,244) - (7,377) C O N D E NS E D C O N S O L I D A T E D S T A T E M E N T O F C A S H F L O W
Slide 26: Notes to the condensed consolidated interim financial information
Notes to the condensed consolidated interim financial information These notes form an integral part of and should be read in conjunction with the accompanying condensed consolidated interim financial information.
Slide 27: General information
1 General information G E N ERAL I N FORM ATION Hafnia Limited (the “Company”), is incorporated and domiciled in Bermuda. The address of its registered office is Washington Mall Phase 2, 4th Floor, Suite 400, 22 Church Street, HM 1189, Hamilton HM EX, Bermuda. The principal activity of the Company i
Slide 28: Basis of preparation
2 Basis of preparation Statement of compliance B A S IS O F P R E PARATION The Interim Financial Information have been prepared in accordance with International Financial Reporting Standards (“IFRS”), and have been prepared under the historical cost convention, except as disclosed in the accounting
Slide 29: Changes in accounting policies
3 Changes in accounting policies New standard and amendments to published standards, effective in 2023 and subsequent years C H A NG E S I N A C C O U NT I N G P O L I CI E S The following new standard and amendments, which are relevant to the Group’s operations but have not been early adopted, have
Slide 30: Significant accounting policies
4 Significant accounting policies The Interim Financial Information for the six-month period from 1 January S I G NI F I C A NT A C C O U N T I N G P O L I C I E S 2023 to 30 June 2023 has been prepared in accordance with IAS 34 ‘Interim Financial Reporting’. The Interim Financial Information should
Slide 31: Significant accounting policies continued
Critical accounting estimates and assumptions 4 The preparation of the Interim Financial Information requires management to make judgements, estimates and assumptions that affect S I G NI F I C A NT A C C O U N T I N G P O L I C I E S C O N T I N U E D the application of accounting policies and the
Slide 32: Revenue
Revenue 5 For the 3 months For the 3 months For the 6 months For the 6 months R E VEN U E ended 30 June 2023 ended 30 June 2022 ended 30 June 2023 ended 30 June 2022 USD’000 USD’000 USD’000 USD’000 Revenue from voyage charter 446,451 448,153 1,017,527 694,413 Revenue from time charter 35,592 19,611
Slide 33: Property, plant and equipment
Property, plant and equipment 6 Right-of-use Dry docking and Other property, plant assets Vessels scrubbers and equipment Total USD’000 USD’000 USD’000 USD’000 USD’000 P R OPE RTY, P L AN T A N D E Q U IPME N T Cost At 1 January 2023 190,878 3,698,658 138,001 1,369 4,028,906 Additions - 88,037 7,813
Slide 34: Property, plant and equipment continued
Right-of-use Dry docking and Other property, plant 6 assets Vessels scrubbers and equipment Total USD’000 USD’000 USD’000 USD’000 USD’000 Cost P R OPE RTY, P L AN T A N D E Q U IPME N T C ON T IN U E D At 1 January 2022 188,983 2,874,159 116,673 380 3,180,195 Acquisition of subsidiaries - 876,246 16
Slide 35: Property, plant and equipment continued
6 P R OPE RTY, P L AN T A N D E Q U IPME N T C ON T IN U E D a. The Group organises the commercial management of the fleet of product tanker vessels into six individual commercial pools: LR1, LR2, MR, Handy, Chemical - MR and Chemical - Handy. Each individual commercial pool constitutes a separate c
Slide 36: Property, plant and equipment continued
As at 30 June 2023, the Group assessed whether these CGUs have 6 indicators of impairment by reference to internal and external factors. The market valuation of the fleet of vessels, as appraised by independent shipbrokers, is one key test performed by the Group. P R OPE RTY, P L AN T A N D E Q U IP
Slide 37: Shareholders' equity
7 Shareholders’ equity S H ARE HOLDERS ’ E Q U ITY a. Authorised share capital The total authorised number of shares is 750,000,000 (30 June 2022: 600,000,000) common shares at par value of USD 0.01 per share. 37
Slide 38: Shareholders' equity continued
7 b. Issued and fully paid share capital Numbers of Share capital Share premium Total shares USD’000 USD’000 USD’000 S H ARE HOLDERS ’ E Q U ITY C ONT INU E D At 1 January 2022 370,244,325 3,703 704,834 708,537 Shares issued for acquisition of CTI 92,112,691 921 206,459 207,380 New shares issued 37,
Slide 39: Shareholders' equity continued
7 c. Other reserves As at 30 June 2023 As at 31 December 2022 (i) USD’000 USD’000 S H ARE HOLDERS ’ E Q U ITY C ONT INU E D Composition: Translation reserve (42) 29 Hedging reserve 67,909 68,458 Share based payment reserve 3,253 5,873 Capital reserve (17,341) (710) 53,779 73,650 For the 6 months end
Slide 40: Borrowings
8 Borrowings B O R R O W I N GS As at 30 As at 31 June 2023 December 2022 USD’000 USD’000 Current Loans from non-related parties 43 673 Bank borrowings 180,873 103,807 Financing liabilities 116,338 170,731 Other lease liabilities 39,285 44,905 Total current borrowings 336,539 320,116 Non-current Loa
Slide 41: Borrowings continued
As at 30 June 2023, bank borrowings consist of eight credit facilities from external financial institutions, namely USD 473 million, USD 374 million, USD 216 8 million, USD 106 million, USD 84 million, USD 39 million and two borrowing base facilities respectively (31 December 2022: USD 473 million,
Slide 42: Borrowings continued
As at 30 June 2023, the financing liabilities consist of various facilities provided by external leasing houses. The vessels under these facilities are legally 8 owned by the leasing houses and leased back to Hafnia. The maturity dates of the facilities range from 2023 to 2033. During the current pe
Slide 43: Commitments
9 Commitments Operating lease commitments - where the Group is a lessor The Group leases vessels to non-related parties under non-cancellable operating lease C O M MIITME NTS agreements. The Group classifies these leases as operating leases as the Group retains substantially all risks and rewards in
Slide 44: Share-based payment arrangements
Share-based payment 10 9 arrangements S H A R E - B A S E D P A Y M E N T A R R A N GE M E NT S The Company operates equity-settled, share-based long term incentive plans (“LTIP”) in which the entity receives services from employees as consideration for equity instruments (share options) in the grou
Slide 45: Share-based payment arrangements continued
The following inputs were used in the measurement of the fair values at Restricted share units (equity-settled) S H A R E - B A S E D P A Y M E N T S A R R A NG E M E N T S C O N T I N U E D respective grant dates of the share options. On 15 March 2022, the Group granted a total of 462,357 restricte
Slide 46: Financial information
Financial information Carrying amount Fair value 11 Fair value hedging instruments/ Financial assets at Mandatorily at FVTPL amortised cost Total Level 1 Level 2 Level 3 Total F I N AN C IAL I N F ORMATION - others USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 At 30 June 2023 Financial ass
Slide 47: Financial information continued
F I N AN C IAL I N F ORMATION C ON T IN U E D Carrying amount Fair value Fair value hedging Financial liabilities at instruments amortised cost Total Level 1 Level 2 Level 3 Total USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 At 30 June 2023 Financial liabilities measured at fair value For
Slide 48: Financial information continued
Carrying amount Fair value Fair value hedging instruments/ Financial assets at F I N AN C IAL I N F ORMATION C ON T IN U E D Mandatorily at FVTPL - amortised cost Total Level 1 Level 2 Level 3 Total others USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 At 31 December 2022 Financial assets m
Slide 49: Financial information continued
Carrying amount Fair value F I N AN C IAL I N F ORMATION C ON T IN U E D Fair value hedging Financial liabilities at instruments amortised cost Total Level 1 Level 2 Level 3 Total USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 At 31 December 2022 Financial liabilities measured at fair value
Slide 50: Financial information continued
F I N AN C IAL I N F ORMATION C ON T IN U E D There were no changes in methods of estimation of fair values of financial assets and liabilities during the reporting period. Information about fair value estimation of financial assets and liabilities is disclosed in the annual consolidated financial s
Slide 51: Significant related party transactions
12 Significant related party transactions In addition to the related party information disclosed elsewhere in the Interim Financial Information, the following significant transactions took place S I G NI F I C A NT R E L A T E D P A R T Y T R A N SA C T I O N S between the Group and related parties
Slide 52: Segment Information
Segment Information 13 For the 3 months ended LR21 LR12 MR3 Handy4 Chemical – Stainless Specialized Total 30 June 2023 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 S E G M E N T I N F O R M AT I O N Revenue 25,455 146,501 216,649 91,965 (54) 1,527 482,043 Voyage expenses (5,294) (43,015)
Slide 53: Segment Information continued
Chemical – For the 6 months ended LR21 LR12 MR3 Handy4 Stainless Specialized Total 13 30 June 2023 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 Revenue 54,950 334,864 478,920 209,143 (255) 1,527 1,079,149 S E G M E N T I N F O R M AT I O N C O N T I N U E D Voyage expenses (12,775) (112,5
Slide 54: Segment Information continued
Chemical – For the 3 months ended LR21 LR12 MR3 Handy4 Stainless Total 13 30 June 2022 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 Revenue 25,889 213,602 144,367 36,083 47,823 467,764 Voyage expenses (7,056) (100,194) (706) 1,451 (12,952) (119,457) S E G M E N T I N F O R M AT I O N C O N T I N
Slide 55: Segment Information continued
Chemical – For the 6 months ended LR21 LR12 MR3 Handy4 Stainless Total 13 30 June 2022 USD’000 USD’000 USD’000 USD’000 USD’000 USD’000 Revenue 40,826 289,767 275,426 68,295 60,781 735,095 Voyage expenses (9,720) (139,915) (54,357) (6,254) (13,163) (223,409) S E G M E N T I N F O R M AT I O N C O N T
Slide 56: Subsequent events
14 Subsequent events On 3 July 2023, Hafnia took delivery of an IMO II - LR1 vessel, Hafnia S U B SE Q U E N T E V E N T S Pioneer. 56
Slide 57: Fleet list
Vessel DWT Year Built Type Vessel DWT Year Built Type FLEET LIST Hafnia Bering 39,067 Apr-15 Handy Hafnia Shenzhen1 75,000 Aug-20 LR1 Hafnia Magellan 39,067 May-15 Handy Hafnia Nanjing1 74,999 Jan-21 LR1 Hafnia Malacca 39,067 Jul-15 Handy Kamome Victoria2 69,998 May-11 LR1 Hafnia Soya 38,700 Nov-15
Slide 58: Fleet list continued
Vessel DWT Year Built Type Vessel DWT Year Built Type F L EET L I ST CONTINUED Beagle2 44,995 Mar-19 MR Hafnia Daisy 49,999 Aug-16 MR Boxer2 49,852 Jun-19 MR Hafnia Henriette 49,999 Jun-16 MR Basset2 49,875 Nov-19 MR Hafnia Kirsten 49,999 Jan-17 MR Bulldog2 49,856 Feb-20 MR Hafnia Lene 49,999 Jul-15
Slide 59: Fleet list continued
Vessel DWT Year Built Type F L EET L I ST CONTINUED Hafnia Almandine 38,506 Feb-15 IMO II - Handy Hafnia Amber 38,506 Feb-15 IMO II - Handy Hafnia Amethyst 38,506 Mar-15 IMO II - Handy Hafnia Ametrine 38,506 Apr-15 IMO II - Handy Hafnia Aventurine 38,506 Apr-15 IMO II - Handy Hafnia Andesine 38,506
Slide 60: Alternative performance measures
Alternative performance measures 60
Slide 61: Alternative performance measures
A L T E R NA T I V E P E R F O R M AN C E M E A SU R E S Alternative performance measures An alternative performance measure (“APM”) is defined as a measure of historical or future financial performance, financial position, or cash flows, other than a financial measure defined or specified in the ap
Slide 62: Alternative performance measures continued
A L T E R NA T I V E P E R F O R M AN C E M E A SU R E S C O N T I N U E D TCE income: Income from its time charters and spot voyages for owned vessels. TCE income is calculated as gross freight income net of broker commissions less voyage expenses. Voyage expenses: Voyage expenses are expenses rela
Slide 63: Alternative performance measures continued
A L T E R NA T I V E P E R F O R M AN C E M E A SU R E S C O N T I N U E D EBITDA: The Company defines EBITDA as earnings before financial Technical off-hire: The Group defines technical off-hire as the time lost income and expenses, depreciation, impairment, amortisation and taxes. due to off-hire
Slide 64: Alternative performance measures continued
A L T E R NA T I V E P E R F O R M AN C E M E A SU R E S C O N T I N U E D Voyage days: The Group defines voyage days as the total number of days (including waiting time) in a period during which each vessel is owned, partly owned, operated under a bareboat arrangement or chartered-in, net of techni