Hafnia Ltd. Q3 FY2024 earnings call

• Hafnia delivered strong Q3 financial results with net profit of $215.6 million, best nine months performance in history. - Successfully redomiciled from Bermuda to Singapore. - Balance sheet strengthened with net LTV ratio at 19.1%, dividend of $0.379 per share paid, highest payout ratio. - Exploring share buyback program up to $100 million from Dec 2, 2024 to Jan 27, 2025. - ESG initiatives: First dual-fuel methanol MR newbuild on track for early 2025 delivery; investment in Complexio for data automation.

For the third quarter, Hafnia achieved a net profit of $215.6 million. The TCE income was $361.6 million, with year-to-date TCE income over $1.15 billion. The fee-focused commercial pool and bunker procurement businesses contributed $7.8 million. The net LTV ratio decreased to 19.1% at the end of Q3. The net asset value per share was around $9.07 or NOK95.2 at the end of the third quarter, and with the current exchange rate, exceeded NOK100.

• Expect stronger Q4 and 2025 with net profits estimated around $800 million. - Share buyback program scheduled from Dec 2, 2024 to Jan 27, 2025, up to $100 million. - Dividend policy with 90% payout ratio maintained, linked to net LTV.

• Potential reopening of Suez Canal could lead to increased supply and negative market impact. - Cannibalization from crude tankers reducing clean cargo demand for product tankers. - Aging fleet of product tankers leading to lower utilization and less efficiency.

Q: Could you clarify how strictly you plan to stick to loan to value calculations for dividend policy?

A: We've been consistent with the dividend policy based on thresholds, and any changes would be discussed in the Board but we like the consistency of payout.

Q: On the reopening of Suez Canal, could it be a positive or negative event?

A: Reopening could lead to shorter distances and extra supply, creating a negative overall impact on the market.

Q: Regarding the $100 million buyback program, does it need to be initiated within the window or expire Jan 27?

A: Jan 27 is the end of the window before the blackout period ahead of financials.

Q: Should the focus shift back to dividends if share price converges to NAV or are buybacks here to stay?

A: We've never ruled out share buybacks, and the discrepancy between share price and NAV makes buybacks an element within the dividend policy.

Q: How are you balancing exercise of vessel purchase options with shareholder returns?

A: Focus is on older part of fleet for sales, and we'll look at refinancing and economics when considering purchase options.