Hafnia Limited · OSL:HAFNI
Hafnia — Q2 2020 Earnings Presentation
16 slides from Hafnia's earnings presentation, Aug 28, 2020
Slide 1: Hafnia Limited Investor Presentation Q2 2020
HAFNIA LIMITED INVESTOR PRESENTATION Q2 2020 28 August 2020
Slide 2: Disclaimer
DISCLAIMER 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 THAT FOLLOWS THE ORAL P
Slide 3: Highlights Q2 2020
HIGHLIGHTS Q2 2020 • Time Charter Equivalent (TCE) earnings for Hafnia were USD 206.9 million in Q2 2020 and USD 400.4 million for H1 2020 (Q2 2019: USD 118.0 million and H1 2019: USD 250.6 million) and EBITDA was USD 145.9 million in Q2 and USD 275.5 million for H1 (Q2 2019: USD 58.9 million and H1
Slide 4: Market Update Q2 2020
MARKET UPDATE Q2 2020 As economic activity started to recover in China in April 2020 many other economies in the West and parts of Asia went into lockdown. Globally, it is estimated that more than four billion people were under some form of lockdown in early Q2 2020. This led to a collapse in global
Slide 5: Market Update Q3 2020, to-date
MARKET UPDATE Q3 2020, to-date There was a notable rebound in freight rates in the US Gulf Coast in early Q3 2020, where more than 2 million barrels per day of offline and derated capacity returned. In response to this, the US Gulf Coast MR market rose by more than USD 13,000/day between late June a
Slide 6: Financial Summary
FINANCIAL SUMMARY Q2 2020 annualized return on invested capital of 18.3% and return on equity of 33.5% Income statement Q3'2019 Q4'2019 Q1'2020 Q2'2020 YTD USDm Revenue 188.5 224.6 268.4 268.9 537.3 Voyage expenses (81.8) (67.5) (75.0) (62.0) (136.9) Return on equity TCE income 106.7 157.1 193.5 206
Slide 7: Pool Economics
POOL ECONOMICS Global commercial platform with chartering teams at strategic locations Pool economics Earnings contribution from commercial management • The pool business generated USD 7.1 million in Q2 Fixed Commission 2020 and USD 13.0 million for the first six months of Pool 2020 commission USD 2
Slide 8: Investment Highlights Summary
INVESTMENT HIGHLIGHTS SUMMARY Key value proposition • Expected full year cash break-even at USD 13,625 per day across the entire fleet provides strong cash 1 Best commercial performance flow potential Strong • Efficient operations with low opex and SG&A earnings combined with best-in-class financing
Slide 9: IMO 2020 Was a Hot Topic - But Then COVID-19 Came
IMO 2020 WAS A HOT TOPIC - BUT THEN COVID-19 CAME 50,000 USA Floating COVID-19 Storage CPP Europe lock down 305 Vessels COVID-19 March 25th 40,000 lock down March 11th OPEC cutting China output by 9.7 COVID-19 Land based storage lock down Mio BBLS Iranian Tanker fills up fast bombed Oct 11th Jan 29t
Slide 10: Peak Rates in Q2 Dropping Going into Q3
PEAK RATES IN Q2 DROPPING GOING INTO Q3 LR2 LR1 100,000 50 70,000 35 60,000 30 80,000 40 50,000 25 60,000 30 USD/day USD/day 40,000 20 USDm USDm 40,000 20 30,000 15 20,000 10 20,000 10 10,000 5 0 0 0 0 Jan-2019 May-2019 Sep-2019 Jan-2020 May-2020 Jan-2019 May-2019 Sep-2019 Jan-2020 May-2020 Earnings
Slide 11: Market Outlook & Risks
MARKET OUTLOOK & RISKS Production, consumption and market balance MR earnings and consumption growth 105 10 40,000 5% 100 35,000 95 5 30,000 0% bbl/day bb/day 90 25,000 usd/day 0 -5% 85 20,000 80 15,000 -10% -5 75 10,000 -15% 70 -10 5,000 2007 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2008 2
Slide 12: Market Outlook & Risks
MARKET OUTLOOK & RISKS Floating storage – as of 17 August Global Oil Demand 2008-10 vs 2019-21 105 90 18 80 16 100 70 14 95 60 12 mbbl/day % of fleet # vessels 50 10 90 40 8 85 30 6 80 20 4 10 2 75 0 0 70 VLCC+ Suezmax Aframax LR2 LR2 LR1 LR1 Panamax MR Handy trading trading trading trading Mar Jun
Slide 13: 2020 Demand Drop but Expected to Exceed Fleet Growth in 2021
2020 DEMAND DROP BUT EXPECTED TO EXCEED FLEET GROWTH IN 2021 Seaborne product demand Orderbook Supply and demand growth for product tankers Bn tonne-miles % of fleet 3,011 2,989 2,888 2,799 70% 2,558 20,000 8% 60% 2,082 50% 6% 1,561 40% 30% 15,000 4% 20% 2% 10% USD/day 0% 10,000 0% 2000 2005 2010 20
Slide 14: Strong Focus on Corporate Governance and Aligned Incentives
STRONG FOCUS ON CORPORATE GOVERNANCE AND ALIGNED INCENTIVES Corporate governance overview Fully aligned incentives with no fee leakage Highly reputable Board of Directors • Hafnia has a fully integrated business model • Highly experienced and reputable Board of Directors - In-house commercial manage
Slide 15: Hafnia's ESG Strategy
HAFNIA’S ESG STRATEGY Hafnia’s ESG efforts at a glance Objectives and status snapshot 1 Key facts and figures Objective Compliance obligations Current status Vetting observations (SIRE) per inspection* <3 Zero oil spills to sea MARPOL Annex I Zero oil spills to sea ✓ Port state control (PSC) deficie
Slide 16: Thank You
an) HAFNIA lember of BW Group THANK YOU www.hafniabw.com