Hafnia Limited · OSL:HAFNI
Hafnia — Q1 2020 Earnings Presentation
19 slides from Hafnia's earnings presentation, May 26, 2020
Slide 1: Hafnia Limited Investor Presentation Q1 2020
HAFNIA LIMITED INVESTOR PRESENTATION Q1 2020 26 May 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: Q1 2020 Highlights
Q1 2020 HIGHLIGHTS Q1 Financials • Time Charter Equivalent (TCE) earnings for Hafnia were USD 193.5 million in Q1 2020 (Q1 2019: USD 132.6 million) and EBITDA was USD 129.6 million (Q1 2019: USD 74.1 million) • The commercially managed pool business generated an income of USD 5.9 million • Net Profi
Slide 4: Highlights: Q1 Market
HIGHLIGHTS Q1 Market The first quarter of 2020 was characterized by the outbreak of the coronavirus resulting in countries adopting various containment and lockdown measures in attempts to curtail the spread of the virus. The virus outbreak had a dampening effect on the demand for refined oil produc
Slide 5: Q2 2020
Q2 2020 Economic activity started to recover in China in April 2020, while many economies in the West and other parts of Asia went into lockdown which resulted in an additional decline in demand for refined products, leading to land storage filling up while contango steepening fuelled a further surg
Slide 6: Financial Summary
FINANCIAL SUMMARY Q1 2020 annualized return on invested capital of 14.3% and return on equity of 27.3% 30% 27.3% Income statement 25% Q1'2019 Q2'2019 Q3'2019 Q4'2019 Q1'2020 USDm 20% 16.2% TCE income 132.6 118.0 106.7 157.1 193.5 15% 11.2% Return on 10% 4.8% Other operating income 0.1 1.4 4.9 6.0 6.
Slide 7: Pool Economics
POOL ECONOMICS Global commercial platform with chartering teams at strategic locations Pool economics Earnings contribution from commercial management • Fixed fee of USD 250 per day per vessel covering the Fixed Commission fixed cost of managing the vessels in the pool Pool commission USD 250 per 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 supposed to be the hot topic.....
IMO 2020 WAS SUPPOSED TO BE THE HOT TOPIC..... 60,000 50,000 USA COVID-19 lock down 40,000 March 25th China Europe COVID-19 COVID-19 lock down lock down USD/day Jan 29th March 11th 30,000 Aramco Refinery WTI $61 bombed by drones Sep 14th Iranian Tanker bombed Oct 11th 20,000 WTI $56 WTI $33 India CO
Slide 10: High Rates and Stable Values
HIGH RATES AND STABLE VALUES LR2 LR1 80,000 50 80,000 50 40 40 60,000 60,000 USD/day USD/day 30 30 USDm USDm 40,000 40,000 20 20 20,000 20,000 10 10 0 0 0 0 Jan-2019 May-2019 Sep-2019 Jan-2020 Jan-2019 May-2019 Sep-2019 Jan-2020 Earnings 5-year avg rates Earnings 5-year avg rates 5 year avg - 5 year
Slide 11: Market Outlook & Risks
MARKET OUTLOOK & RISKS Production, consumption and market balance Comments 105 15 100 • In the last 20 years we have seen 5 periods with 5-6 quarters of 95 10 inventory draws. bbl/day bb/day 90 5 • There have been various reasons for the draws, where the first 85 ones were driven by economic setback
Slide 12: Market Outlook & Risks
MARKET OUTLOOK & RISKS Floating storage – 25th May Global Oil Demand 2008-10 vs 2019-20 200 20 105 100 150 15 95 mbbl/day 90 100 10 85 % # 80 75 50 5 70 Mar Jun Sep Dec Mar Jun Sep Dec Mar 0 0 VLCC+ Suezmax Aframax LR2 LR2 LR1 LR1 Panamax MR Handy 2008-2010 2019 - Q2 2020 IEA Forecast Q3-Q4 2020 tra
Slide 13: Demand in 2020 but Expected to Exceed Supply Growth in 2021
DEMAND IN 2020 BUT EXPECTED TO EXCEED SUPPLY 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 201
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: Appendix
QHAENIA ‘Member of BW Group APPENDIX
Slide 17: Largest Product Tanker Operator
LARGEST PRODUCT TANKER OPERATOR Largest operator of product tankers1 Second largest owner of product tankers2 # vessels MR & Handy LR1 LR2 NB MR & Handy LR1 LR2 NB 200 140 128 180 176 120 160 143 138 100 93 140 81 120 113 80 100 67 81 62 60 80 50 48 60 50 49 40 40 20 20 0 0 Hafnia Maersk Scorpio Nor
Slide 18: Growing Regional Imbalances of Oil Products Adds to Tanker Tonne-Mile Demand
GROWING REGIONAL IMBALANCES OF OIL PRODUCTS SIGNIFICANTLY ADDS TO TANKER TONNE-MILE DEMAND Major seaborne oil products trade routes 2019 Global seaborne oil products imports (mbpd) Global seaborne oil products exports (mbpd) Source: Clarksons Research, April 2020 6.2 7.7 8.3 5.4 5.4 5.8 6.5 6.6 3.4
Slide 19: Thank You
an) HAFNIA lember of BW Group THANK YOU www.hafniabw.com