CEO Statement
While 2025 began on a softer footing, market conditions strengthened steadily
through the second half of the year. The product tanker market remained
seasonally firm in the fourth quarter, allowing the year to close on a strong
note. This improvement was underpinned by continued growth in clean petroleum
product exports, increased crude oil production prompting a meaningful shift of
LR2 vessels into dirty trading, and the sustained impact of geopolitical
developments, particularly in Russia and the Red Sea, which continue to exert
significant influence on the product tanker market.
With this, I am pleased to announce that we delivered our strongest quarterly
result of 2025. In Q4, we recorded a net profit of USD 109.7 million, which
included USD 9.5 million from gains on vessel sales, while our fee-based
business generated USD 6.9 million. This brings our full-year net profit to USD
339.7 million, marking another year of strong performance.
As per earlier quarters of 2025, our Q4 results reflect the impact of several
vessels undergoing scheduled drydocking, resulting in approximately 550 off-hire
days. This was around 120 days higher than expected, mainly due to unscheduled
repairs for three vessels. We expect drydocking activity to continue into the
upcoming quarters of 2026, but anticipate off-hire days to taper off slightly,
to around 180 in Q1 2026.
At the end of the fourth quarter, our net asset value (NAV1) stood at
approximately USD 3.5 billion, equivalent to USD 7.04 (~NOK 70.79) per share.
Our net Loan-to-Value (LTV) ratio increased from 20.5% in the third quarter to
24.9%, primarily reflecting our investment in TORM, whose market value is
included in the calculation. This was partly offset by higher vessel market
valuations and strong operational cash flow generation.
In line with our ongoing fleet renewal strategy, we continue to divest older
tonnage. In January 2026, we completed the sale of the 2013-built MR vessels,
the Hafnia Libra and the Hafnia Phoenix, and took delivery of the Ecomar
Gironde, the fourth and final dual-fuel IMO II MR tanker under our Ecomar joint
venture with Socatra of France. Over the first quarter, we have further sold
four LR1 vessels, two MR vessels and four Handy vessels to external parties,
which are pending delivery to the buyers.
I am pleased to announce a 80% payout ratio for the fourth quarter. We will
distribute a total of USD 87.7 million in dividends, or USD 0.1762 per share.
This brings our total dividends for 2025 results to USD 0.5457 per share which,
based on our share price at the end of 2025, represents a dividend yield of
approximately 10%.
On 22 December 2025, Hafnia completed its acquisition of 13.97% of TORM shares
from Oaktree. We acquired the shares with a belief that consolidation with TORM
represents a compelling long-term value creation opportunity for both companies
and their respective shareholders through enhanced scale, meaningful operational
synergies, and improved capital markets positioning. While we are convinced of
the rationale for consolidation, we cannot predict the timing or outcome, and
will remain patient and disciplined in our approach to ensure that any steps we
take are aligned with our commitment to create value for Hafnia's shareholders.
Looking ahead to 2026, we entered the year at seasonally strong rate levels,
although we anticipate a gradual easing as newbuild deliveries enter the market.
A continued firm crude market is, however, expected to partially mitigate the
impact of additional supply. Demand fundamentals remain sound, while political
uncertainty continues to represent a key variable, such as potential changes to
sanctions regimes, including those affecting Venezuela, Iran, and Russia, which
could materially affect trade flows and influence the overall market outlook.
Accordingly, shifts in trade policy, evolving oil transportation patterns, and
ongoing geopolitical tensions are likely to remain the principal swing factors
shaping market conditions for the year ahead.
As of 11 February 2026, 76% of our Q1 earning days are covered at an average of
USD 29,979 per day, and 33% of the earning days for 2026 are covered at USD
27,972 per day.
We remain encouraged by the strength of the market and believe that 2026 is set
to deliver another year of robust earnings.
- Mikael Skov, CEO Hafnia