Hafnia Limited · OSL:HAFNI
Hafnia — Investor Presentation (May 2022)
35 slides from Hafnia's investor presentation, May 4, 2022
Slide 1: Hafnia Limited Company Presentation
HAFNIA LIMITED C O M PA N Y P R E S E N TAT I O N 4 May 2022
Slide 2: Disclaimer
DISCLAIMER THIS PRESENTATION AND ITS CONTENT IS CONFIDENTIAL AND NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN CANADA, JAPAN, AUSTRALIA OR THE UNITED STATES, OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL. THIS PRESENTATION D
Slide 3: Agenda
AGENDA Investment Highlights Market Outlook Financial Summary Risk Factors
Slide 4: The leading product and chemical tanker operator
THE LEADING PRODUCT AND CHEMICAL TANKER OPERATOR Fully integrated shipping platform with 100% alignment of interests and no fee leakage Investment highlights Operational Overview Strong market outlook with 1 improving fundamentals Technical Shipowner Pool Platform Management Largest operator and own
Slide 5: Two major acquisitions successfully executed
TWO MAJOR ACQUISITIONS SUCCESSFULLY EXECUTED The concluded transactions showcase Hafnia’s ability to pounce on strategic growth opportunities at attractive points in the cycle 1. Acquisition of Chemical Tankers Inc («CTI») 2. Acquisition of 12x Modern LR1s from Scorpio Tankers ▪ Acquisition of CTI c
Slide 6: Optimal timing
OPTIMAL TIMING Subdued market environment created strategic opportunities USD/day 60,000 1 LR1 ECO MR ECO Handy ECO Average of LR1, MR, Handy 2 50,000 40,000 1. Acquisition of Chemical Tankers Inc («CTI») 30,000 2. Acquisition of 12x Modern LR1s from Scorpio Tankers 20,000 1 2 10,000 0 01-Jan-2021 0
Slide 7: Unprecedented supply situation
UNPRECEDENTED SUPPLY SITUATION Histroically high replacement cost combined with long lead times, in a rising energy and commodity price environment • Fully booked yards until end 2025 entails high visibility on supply • Historical tendency for shipowners recycle capital into newbuildings in high cyc
Slide 8: Strong market outlook
1 STRONG MARKET OUTLOOK Latest fixtures and coverage indicates a meaningful market improvement Market Overview Earnings Coverage1 as of 26 April 2022 • Geo-political tensions expected to impact market over the medium-term: Q2 2022 2022 ➢ Effect on tonne-mile yet to be confirmed however positive impa
Slide 9: Largest operator and owner of product tankers
2 LARGEST OPERATOR AND OWNER OF PRODUCT TANKERS1 Largest operator of product tankers2 Largest owner of product tankers3 # vessels # vessels 250 235 200 200 184 150 137 150 110 124 118 100 80 100 83 69 58 66 50 50 50 0 0 Hafnia Maersk Norient Scorpio Torm Navig8 Hafnia Scorpio Torm Cosco Sinokor SCF
Slide 10: Lowest operating cost and cost of funding
3 LOWEST OPERATING COST AND COST OF FUNDING The competitive cost base creates an attractive earnings potential, particularly in weaker markets FY 2021 OPEX and SG&A FY2021 Funding Costs1 USD/day 10,000 6% 8,499 7,839 5% 4.7% 8,000 4% 6,000 3.3% 3% 4,000 2% 2,000 1% - 0% Hafnia Peers Hafnia Peers Haf
Slide 11: Significant earnings potential
4 SIGNIFICANT EARNINGS POTENTIAL The competitive operating cash break-even of USD ~14,150/day1 ensures attractive shareholder returns Strong earnings potential above cash-break even Cash Break-Even1 + USD 1,000 / day + USD 2,000 / day + USD 4,000 / day + USD 6,000 / day + USD 12,000 / day 760.5 551.
Slide 12: Robust business with diversified revenue streams
5 ROBUST BUSINESS WITH DIVERSIFIED REVENUE STREAMS Hafnia Pools Trading Flexibility Commission: Fixed Commission: Variable LR/MR/Handy: LR/MR/Handy: TANKER CARGO TYPE ▪ USD 250/d per vessel Pool ▪ 2.25% of net TCE Specialised: Commission Specialised: CRUDE CPP EASY CHEMS SPEC. CHEMS ▪ Small/City: US
Slide 13: Strong relationships with all stakeholders
6 STRONG RELATIONSHIPS WITH ALL STAKEHOLDERS Sound track-record and creditworthiness are key enablers of long-lasting relationships with all stakeholders Oil majors Lenders Pool members Yards Tier 1 shipping sponsor 13 Source: Hafnia
Slide 14: Hafnia's ESG strategy
7 HAFNIA’S ESG STRATEGY Our ESG Initiatives IMO’s Carbon Intensity Targets 8 Hafnia's Status Hafnia's Projected 7 gms CO2 / DWT - Nm IMO's Target Carbon Intensity 6.20 (Pre-Transaction) 6.04 IMO's Target Carbon Intensity 5.77 (Post-Transaction) 6 5 4.67 5.83 5.70 5.40 6.4% better than Aim for two 4.
Slide 15: Hafnia's ESG strategy
7 HAFNIA’S ESG STRATEGY Highly Reputable Board of Directors Social Impact • Hafnia recognises the leading role it must play in addressing social challenges and is consistently working on initiatives to ensure a fair, safe and inclusive work environment, where everyone is encouraged to achieve their
Slide 16: Agenda
AGENDA Investment Highlights Market Outlook Financial Summary Risk Factors
Slide 17: Oil and energy prices on the rise
OIL AND ENERGY PRICES ON THE RISE Supply and Demand of Global Oil OPEC Market Share of Oil Supply m barrels/d % 105 40% 100 38% 95 36% 34.5% 90 34% 85 32% 80 30% 4Q19 1Q20 2Q20 3Q20 4Q20 1Q21 2Q21 3Q21 4Q21 1Q22 2Q22 3Q22 4Q22 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Gob
Slide 18: Mobility and international travel increasing
MOBILITY AND INTERNATIONAL TRAVEL INCREASING TSA Travellers Throughput in US 2019-2022 Demand of Oil Products 2019-2022 m travellers m barrels/d 3.0 30 2.5 25 2.0 20 1.5 15 1.0 10 0.5 5 0.0 0 Jan-19 Apr-19 Jul-19 Oct-19 Jan-20 Apr-20 Jul-20 Oct-20 Jan-21 Apr-21 Jul-21 Oct-21 Jan-22 Apr-22 LPG/Ethane
Slide 19: Inventories continue to fall to low levels
INVENTORIES CONTINUE TO FALL TO LOW LEVELS Trade Volumes vs Tonne-Miles CPPs and Chemicals Dirty Petroleum Products m barrels b tonne-miles b barrels b tonne-miles 600 271.3 280.3 300 130 1,100 267.8 969.7 909.1 902.0 500 428.6 445.5 427.8 900 120 400 200 113.6 112.3 110.8 700 300 110 200 500 100 10
Slide 20: Oil trade routes and refineries growth
OIL TRADE ROUTES AND REFINERIES GROWTH Major Seaborne Oil Products Trade Routes 2021 • We continue to see the trend of refinery closures, with 2.8 mb/day of closures in 2021 mainly from US, Europe and Asia. These closures are expected to drive firm growth in imports into these regions, with longer-
Slide 21: Global product tanker fleet
GLOBAL PRODUCT TANKER FLEET Orderbook % Fleet (DWT) Product Tankers Fleet Age Profile % of Fleet % of Fleet 100 50% 80 40% 60 April 2022: 30% ▪ Product: 4.98% (↓49% from Apr 2017) 40 ▪ Crude: 6.83% (↓48% from Apr 2017) 20% ▪ Chemical: 7.09% (↓51% from Apr 2017) 20 10% 0 0% 1998 2000 2002 2004 2006 2
Slide 22: Rising geopolitical tensions
RISING GEOPOLITICAL TENSIONS Russia & Ukraine 2021 Seaborne Trade Black Sea 2022 Vessel Activity m GT Russia Exports Ukrainian Exports 10 Cargo Type Mt % global Mt % global Crude Oil 158 8.6% 0.1 0.0% 8 Oil Products 110 11.0% <0.05 0.0% Chemicals 9 2.6% 5 1.5% 6 LNG 29 7.7% - - 4 LPG 0.4 0.4% 0.01 0
Slide 23: Limited concerns related to geopolitical tensions
LIMITED CONCERNS RELATED TO GEOPOLITICAL TENSIONS Geopolitical turmoil is expected to have little influence on oil demand Inflation versus oil demand World Oil Demand, mb /d US inflation % 105 8% • Analyst reports will state that 100 elevated inflation will hamper 6% 95 world oil demand, historic 4%
Slide 24: Fleet utilization and tonne-mile increase
FLEET UTILIZATION AND TONNE-MILE INCREASE MR, LR1 and LR2 are seeing an increase in clean laden utilization MR, LR1 and LR2 Clean Utilization # Vessels Laden Laden NM per vessel/day 1,230 215 209 • MR, LR1 & LR2 laden 1,210 210 utilization has increased 1,190 205 by 6% since beginning of Russia / Uk
Slide 25: Agenda
AGENDA Investment Highlights Market Outlook Financial Summary Risk Factors
Slide 26: FY2021 financial summary
FY2021 FINANCIAL SUMMARY 2021 saw an average TCE of USD 12,141 per day and OPEX of USD 6,891 per day TCE Segment Breakdown Q4 2021 FY 2021 Operating TCE TCE Operating TCE TCE 12% 13% days1 (USD/day) (USD m) days1 (USD/day) (USD m) LR2 LR2 552 21,293 11.8 2,190 23,382 51.2 LR1 LR1 2,182 12,838 28.0 8
Slide 27: FY2021 financial summary
FY2021 FINANCIAL SUMMARY Income Statement Q1 2021 Q2 2021 Q3 2021 Q4 2021 FY2021 USDm Revenue 179.3 198.0 189.5 244.4 811.2 Voyage expenses (79.4) (96.3) (100.8) (131.8) (408.3) TCE income 100.0 101.6 88.7 112.6 402.9 Other operating income1 4.6 5.4 7.0 6.2 23.2 Vessel operating expenses (45.6) (49.
Slide 28: Agenda
AGENDA Investment Highlights Market Outlook Financial Summary Risk Factors
Slide 29: Risks related to the Group and its operations (1 of 2)
RISKS RELATED TO THE GROUP AND ITS OPERATIONS (1 OF 2) • The Group may not be able to implement its business strategy successfully or manage its development effectively. The Group's future development will depend on the successful implementation of the Group's business strategy. The Group's ability
Slide 30: Risks related to the Group and its operations (2 of 2)
RISKS RELATED TO THE GROUP AND ITS OPERATIONS (2 OF 2) • Acts of piracy and other types of attacks on ocean-going vessels have increased in frequency in recent years, which could adversely affect the Group's business. Acts of terrorism, piracy and armed robbery of vessels have historically occurred
Slide 31: Risks related to the industry in which the Group operates
RISKS RELATED TO THE INDUSTRY IN WHICH THE GROUP OPERATES • The product tanker industry is cyclical in terms of rates and profitability, which may lead to volatility in the Group's earnings and available cash flow. The Group's earnings and available cash rely predominantly on the Group's ability to
Slide 32: Risks relating to laws, regulations and litigation
RISKS RELATING TO LAWS, REGULATIONS AND LITIGATION • The Group is subject to a wide variety of environmental laws and regulations, where non-compliance may have an adverse effect on the Group's results of operations. The shipping industry is affected by extensive and changing international conventio
Slide 33: Risks related to financing and market risk
RISKS RELATED TO FINANCING AND MARKET RISK • The Group's existing or future debt arrangements could limit the Group's liquidity and flexibility in obtaining additional financing, in pursuing other business opportunities or corporate activities or the Company's ability to declare dividends to its sha
Slide 34: Contacts
CONTACTS CEO CFO EVP EVP, IR, Research and Commercial Performance Management MIKAEL SKOV PERRY VAN ECHTELT JENS CHRISTOPHERSEN THOMAS ANDERSEN Email: ms@hafniabw.com Email: pve@hafniabw.com Email: jch@hafniabw.com Email: tha@hafniabw.com 34
Slide 35: Thank you
THANK YOU www.hafniabw.com