Hafnia Limited · OSL:HAFNI
Hafnia — Q3 2022 Earnings Presentation
26 slides from Hafnia's earnings presentation, Nov 21, 2022
Slide 1: Hafnia Limited Investor Presentation Q3 2022
HAFNIA LIMITED I N V E S TO R P R E S E N TAT I O N Q3 2022 21 November 2022
Slide 2: Disclaimer – Safe Harbor Message
DISCLAIMER – Safe Harbor Message IMPORTANT: YOU MUST READ THE FOLLOWING BEFORE CONTINUING. THE FOLLOWING APPLIES TO THIS DOCUMENT, THE ORAL PRESENTATION OF THE INFORMATION IN THIS DOCUMENT BY HAFNIA LIMITED (THE "COMPANY") OR ANY PERSON ON BEHALF OF THE COMPANY, AND ANY QUESTION-AND-ANSWER SESSION T
Slide 3: Agenda
AGENDA Q3 2022 Overview Financial Summary Industry Review & Outlook ESG Governance 3
Slide 4: Introduction to Hafnia
INTRODUCTION TO HAFNIA Fully integrated shipping platform with 100% alignment of interests and no fee leakage LARGEST OPERATOR OF PRODUCT AND CHEMICAL STRONG INDUSTRY TANKERS IN THE WORLD STRONG RELATIONSHIPS FUNDAMENTALS AND WITH INDUSTRY PARTNERS EARNINGS POTENTIAL AND INVESTOR COMMUNITY ROBUST BU
Slide 5: World's Leading Product and Chemical Tanker Company
WORLD’S LEADING PRODUCT AND CHEMICAL TANKER COMPANY Share Price Performance Volume ('000) M&A AND JOINT VENTURES NOK/share ▪ Vista joint venture 70 6,000 ▪ Andromeda joint venture 60 ▪ Acquisition of CTI 5,000 ▪ Acquisition of 12 LR1s from Scorpio 50 4,000 40 CONSISTENT DIVIDEND PAYOUT 3,000 ▪ Consi
Slide 6: Creating Shareholder Value
CREATING SHAREHOLDER VALUE Return to Shareholders Increase in Acquired Vessels Value USDm USDm ~1,473 500 60% 1,500 ~1,065 1,000 49% 50% 50% 50% 500 400 0 Purchase price Q3 2022 average broker valuation + YTD net 40% profit Chemical vessels (excl. eight stainless steel) 12 LR1s YTD net profit of the
Slide 7: Evolution of Dividend Policy
EVOLUTION OF DIVIDEND POLICY Current Dividend Policy “The Company targets a quarterly dividend based on a pay-out ratio of 50% of annual net profit, adjusted for extraordinary items. The final amount of dividend is to be decided by the Board of Directors. In addition to cash dividends, the Company m
Slide 8: Hafnia's ESG Strategy
HAFNIA’S ESG STRATEGY Transformational Clean Fuel Project Vessel Optimisation Initiatives • Hafnia is also committed to IMO’s Carbon Intensity Targets, including its regulations on sulphur emissions and 2030 goals. • In 2021, across Hafnia’s owned fleet, our carbon intensity of 5.22 grams/ton nautic
Slide 9: Agenda
AGENDA Q3 2022 Overview Financial Summary Industry Review & Outlook ESG Governance 9
Slide 10: Q3 & YTD 2022 Financial Highlights
Q3 & YTD 2022 FINANCIAL HIGHLIGHTS TCE Income EBITDA Pool and Bunker Income YTD 2022 YTD 2022 YTD 2022 USD 919.3M USD 671.0M USD 26.6M Q3 2022 Q3 2022 Q3 2022 USD 407.6M USD 326.0M USD 12.1M Net Income Dividends Return on Equity YTD 2022 YTD 2022 YTD 2022 USD 487.8M USD 243.7M ROE 43.4% Q3 2022 Q3 2
Slide 11: Q3 & YTD 2022 Financial Summary
Q3 & YTD 2022 FINANCIAL SUMMARY Income Statement Q3 2021 YTD 2021 Q3 2022 YTD 2022 Total Liquidity & Hedge Ratio USDm USDm TCE income 88.7 290.3 407.6 919.3 500 Weighted average 100% ~400 hedged rate of 1.69% Other operating income 7.0 17.0 12.1 26.6 400 80% 62.5% Vessel operating expenses (51.4) (1
Slide 12: Q3 & YTD 2022 Financial Summary: TCE
Q3 & YTD 2022 FINANCIAL SUMMARY Q3 2022 saw an average TCE of USD 36,367 per day TCE Segment Breakdown Coverage as of 16 November 2022 Q3 2021 Q3 2022 Q4 2022 2023 Operating TCE Operating TCE Covered Covered rates Covered Covered rates days1 (USD/day) days1 (USD/day) (%) (USD/day) (%) (USD/day) LR2
Slide 13: Q3 & YTD 2022 Financial Summary: OPEX
Q3 & YTD 2022 FINANCIAL SUMMARY Q3 2022 saw an average OPEX of USD 7,135 per day OPEX Segment Breakdown Q3 2022 Operating Cash Flow Breakeven (Full Fleet) USD/day Q3 2021 Q3 2022 Q3 2021 Q3 2022 20,000 OPEX1 OPEX1 Calendar days Calendar days (USD/day) (USD/day) LR2 552 6,631 552 8,061 15,000 LR12 2,
Slide 14: Expected Record Net Profit in 2022
EXPECTED RECORD NET PROFIT IN 2022 Upturn in product tanker market signify strong earnings potential for 2023 Analysts’ Consensus1 Q4 2022 Covered Rates2 USDm USDm 1,500 1,500 ~1,240 ~1,020 ~1,010 ~980 1,000 1,000 ~940 ~740 ~710 ~730 500 500 0 0 FY 2022 EBITDA FY 2022 Net income FY 2023 EBITDA FY 20
Slide 15: Agenda
AGENDA Q3 2022 Overview Financial Summary Industry Review & Outlook ESG Governance 15
Slide 16: Low Deliveries Higher Utilization
LOW DELIVERIES HIGHER UTILIZATION Product Tanker DWT Development in % of World Oil Demand CPP Handy, MR, LR1 & LR2 Utilization & Laden Speed # DWT increase in % # World oil demand # Laden Speed of World oil demand (m barrel) # vessels (Knots) & DWT development 1,700 16 16% 200 Average DWT increase A
Slide 17: Redrawing of Oil Trade Routes
REDRAWING OF OIL TRADE ROUTES Russian CPP Daily Loadings to EU Incl UK Russian CPP Daily Loadings to World Excl EU m barrels / day m barrels / day 1.2 1.1 0.6 0.5 1.0 0.5 0.4 0.8 0.7 0.4 0.6 0.3 0.4 0.2 0.2 0.1 0.0 0.0 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Qtr1 Qtr2 Qtr3 Qtr4 Q
Slide 18: Global Laden and Ballast
GLOBAL LADEN AND BALLAST Worldwide Laden Distance (Handy, MR, LR1 and LR2) Worldwide Ballast Distance (Handy, MR, LR1 and LR2) # NM Laden per # Hours laden per # NM ballast per # Hours ballst per voyage voyage voyage voyage 3,100 500 1,800 400 450 3,000 1,700 350 400 2,900 1,600 300 350 2,800 1,500
Slide 19: Expected Growth in Middle East Refinery Output
EXPECTED GROWTH IN MIDDLE EAST REFINERY OUTPUT Jizan CPP Refinery Output Kuwait Exports barrels / day barrels / day 200,000 700,000 600,000 150,000 124,021 500,000 100,000 400,000 50,000 300,000 0 200,000 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov Jan Mar
Slide 20: Cargo Volumes and Ton-Miles
CARGO VOLUMES AND TON-MILES CPPs and Chemicals Dirty Petroleum Products m barrels/day b ton-miles/day m barrels/day b ton-miles/day 20 9.37 10 55 35.0 9.17 31.7 31.9 8.92 19 9 50 8.70 30.0 18.30 28.3 45.5 18 9 26.5 44.3 45 17.48 17.50 17.52 8.15 41.7 25.0 17 8 40 39.0 20.0 16 8 35 15.49 15 7 30 15.0
Slide 21: Depletion of Inventory Levels Amid Production Cuts
DEPLETION OF INVENTORY LEVELS AMID PRODUCTION CUTS East vs West CPP Inventory m barrels $/day 1,600 45,000 1,500 40,000 1,400 35,000 1,300 30,000 1,200 25,000 1,100 20,000 1,000 15,000 900 800 10,000 700 5,000 600 0 Jan Jan Mar May Sep Jan Sep Jan Jan Jan Nov Mar May Nov Mar May Sep Nov Mar May Sep
Slide 22: Tighter Product Tanker Market
TIGHTER PRODUCT TANKER MARKET Product Orderbook 2023 Onwards Expected Scrapping & Net Additions # of vessels # of vessels 93 200 100 50 35 150 0 -11 -14 100 -50 -32 -100 50 -150 0 -200 Handy MR LR1 LR2 Total Handy MR LR1 LR2 Total Order book 2023+ Order Book MR Equivalents Equivaqlents Future Scrapp
Slide 23: Agenda
AGENDA Q2 2022 Overview Financial Summary Industry Review & Outlook ESG Governance 23
Slide 24: Governance of ESG in Hafnia
GOVERNANCE OF ESG IN HAFNIA • Governance of ESG strategy is anchored with Board of Directors the Board of Directors and the Leadership Oversees ESG Strategy, Progress and Risks Audit Committee Group. Oversees ESG disclosures, processes, • Ownership and responsibility to drive actions controls and ex
Slide 25: 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 25
Slide 26: Thank You
THANK YOU www.hafniabw.com