Research

Hafnia (Investment case): Q1 2026 delivers strong cash flow and dividends amid geopolitical disruption

Summary

Hafnia reported a strong Q1 2026 with a net profit of USD 179.7m, supported by high freight rates due to geopolitical disruptions, resulting in a return on equity of 29.5% and a reduced net loan-to-value ratio of 20.2%.
The company declared a Q1 dividend of USD 0.2877 per share, representing an 80% payout of net profit, and increased its net asset value to approximately USD 4.0bn.
Hafnia is advancing its fleet renewal strategy by divesting older vessels and contracting new builds, while its stake in TORM has yielded significant unrealized gains and dividend income.
Despite trading at a discount to its net asset value, Hafnia offers the highest dividend yield among peers at 8.1% for 2026E, with potential for continued returns if current market conditions persist.

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Following Hafnia's Q1 2026 quarterly report, we have updated our investment case on the company. Our updated investment case covers the key investment reasons, risks, and valuation perspective relative to product tanker peers.

Hafnia delivered a strong start to 2026 with Q1 net profit of USD 179.7m (USD 0.36/share), TCE income of USD 282.5m, and adjusted EBITDA of USD 198.6m, supported by an average fleet TCE of USD 30,327 per day as the Persian Gulf conflict and the closure of the Strait of Hormuz rerouted global trade flows and pushed freight rates to record levels. Return on equity rose to 29.5% annualised, while the net loan-to-value ratio fell to 20.2% from 24.9% on strong cash generation from operations and vessel sales. As of 13 May 2026, 73% of Q2 earning days were covered at USD 46,600 per day, supporting management's expectation that Q2 will be stronger than Q1.

The board declared a Q1 dividend of USD 0.2877 per share, an 80% payout of net profit totalling USD 143.8m, in line with the tiered policy that links payout to leverage. Net asset value rose to approximately USD 4.0bn, or USD 8.09 per share (~NOK 78.81), up USD 0.5bn from Q4 2025 on higher vessel valuations across all segments. Hafnia is also progressing fleet renewal, having divested older tonnage while contracting eight MR newbuilds at HHI (~USD 405m) and exercising two further options, and its 13.97% stake in peer TORM is now valued at USD 395m, delivering a ~USD 118m unrealized gain and ~USD 10m in dividend income since December 2025. On valuation, Hafnia trades at a clear discount to current NAV and offers the highest dividend yield in the peer group at 8.1% for 2026E, leaving room for continued returns if the elevated rate environment persists.

Disclaimer: HC Andersen Capital receives payment from Hafnia for a Digital IR subscription agreement. /Rasmus Køjborg, CFA & William Jørck 16:10 10/06-2026

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Hafnia is an international shipping company that specializes in the transportation of oil and chemical products. It started trading in Norway on the NOTC marketplace for unlisted shares in 2013. In 2019 Hafnia listed on the main market in Norway – Oslo Stock Exchange. The company, headquartered in Singapore, operates in the product tanker market, where it manages six pools combining self-owned and externally-owned vessels to benefit from economies of scale. The pools distribute profits/loss across all vessels in the pool, and Hafnia charges a commission for operating externally-owned tankers. Hafnia’s six pools are categorized by vessel size/type, and reflect the fleet of vessels it owns. Its six pools are the: Handy Pool, MR Pool, LR Pool, LR2 Pool, Specialized Pool and Chemicals Pool. The MR and LR pools are considerably outsize the Handy and Specialized pools in terms of revenue and fleet size. Hafnia’s pools are primarily active in the product tanker spot market, but has also recently ramped up on chemical tankers. In addition, Hafnia procures the bunker fuel for its partners at competitive prices for which it receives a commission.