 | After a strong second quarter, the product tanker market softened seasonally in the third quarter, due to refinery maintenance, lower refinery margins, and increased cannibalization from the crude sector. Despite these challenges, Hafnia has continued to perform well, delivering solid earnings. I am pleased to announce that we achieved a net profit of USD 215.6 million in Q3, bringing our year-to-date net profit to USD 694.4 million – the best nine-month performance in our company’s history. Our adjacent fee-generating business segments have also performed strongly, contributing USD 7.8 million to our overall results. At the end of the third quarter, our net asset value (NAV)1 reached approximately USD 4.6 billion, reflecting the increased market value of our vessels and strong operating cashflows, which equates to an NAV per share of about USD 9.07 (NOK 95.24). Our net Loan-to-Value (LTV) ratio decreased to 19.1% at the end of the quarter. This allowed us to reach a new milestone in our dividend policy, and we are pleased to announce a dividend payout ratio of 90% for the quarter. For the quarter, we will distribute USD 194.1 million or USD 0.3790 per share in dividends.
|
On October 1, 2024, we successfully completed the redomiciliation of Hafnia Limited from Bermuda to Singapore. As Hafnia Limited is a Singapore tax resident post-redomiciliation, no Singapore withholding taxes will be imposed on dividend distributions to all shareholders. There is, therefore, no change in the dividend treatment resulting from the redomiciliation.
Hafnia’s Board has authorized management to initiate a share buyback program of up to USD 100 million, from December 2, 2024, to January 27, 2025, subject to market conditions. Authorization will be reviewed on a quarterly basis. We will disclose the structure of the program and details of any buyback as it occurs. The amount utilized for this buyback program will be deducted before declaring dividends for Q4 2024. This ensures the combined total of dividends and share buybacks aligns to our payout ratio under our dividend policy, reflecting our dedication to shareholder value while also ensuring strategic flexibility.
While market conditions softened slightly due to competition from the crude sector, Q3 trade volumes and earnings remained above last year’s levels, driven by strong global oil demand and increased tonne-miles from refinery dislocations. Looking ahead, seasonal strengthening in the crude sector, coupled with the technical challenges of transporting products on crude carriers, is expected to reduce this cannibalization. Additionally, seasonal demand increases and geopolitical tensions will further support product demand and tonne-miles.
As of November 18, 2024, 71% of the Q4 earning days are covered at an average of USD 24,004 per day, and 9% is covered at USD 24,089 per day for 2025.
We continue to enhance our technological capabilities and are optimistic about our strategic investment in Complexio Foundational AI to advance data automation. Complexio’s ‘bottom-up’ approach first ingests companies’ unstructured and structured data and then, via its multi-modal framework - currently leveraging eight Large Language Models (LLMs) - maps this data into a comprehensive landscape.
With ongoing advancements in prediction and reasoning, this detailed understanding enables the automation of recurring processes such as chartering, ship clearance, finance management, and contract negotiation. These continuous R&D improvements, combined with expanding partnerships with industry leaders like Marfin, CTM, Sogemm, BW Epic Kosan, and Alassia Newships, reinforce Hafnia’s position at the forefront of technological innovation.
Mikael Skov
CEO Hafnia
1 NAV is calculated using the fair value of Hafnia’s owned vessels.
| Safe Harbour Statement | 4 |
| | |
| Highlights – Q3 and YTD 9M 2024 | 5 |
| | |
| Key figures | 8 |
| | |
| Condensed consolidated statement of comprehensive income | 9 |
| | |
| Condensed consolidated balance sheet | 10 |
| | |
| Condensed consolidated statement of changes in equity | 11 |
| | |
| Condensed consolidated statement of cash flows | 12 |
| | |
| Cash and cash flows | 13 |
| | |
| Dividend policy | 13 |
| | |
| Coverage of earning days | 14 |
| | |
| Tanker segment results | 15 |
Notes to the Condensed Consolidated Quarterly Financial Information
| Note 1: Property, plant and equipment | 16 |
| | |
| Note 2: Borrowings | 18 |
| | |
| Note 3: Commitments | 21 |
| | |
| Note 4: Financial information | 22 |
| | |
| Note 5: Joint ventures | 24 |
| | |
| Note 6: Segment information | 28 |
| | |
| Note 7: Subsequent events | 30 |
| | |
| Note 8: Fleet list | 30 |
| | |
| Note 9: Non-IFRS measures | 32 |
Disclaimer regarding forward-looking statements in the
interim report
Matters discussed in this unaudited interim report (this “Report”) may constitute “forward-looking statements”. The Private Securities Litigation Reform Act of 1995 provides safe harbour protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts or present facts and circumstances.
We desire to take advantage of the safe harbour provisions of the Private Securities Litigation Reform Act of 1995 and are including this cautionary statement in connection with this safe harbour legislation. This Report and any other written or oral statements made by us or on our behalf may include forward-looking statements, which reflect our current views with respect to future events and financial and operational performance.
These forward-looking statements may be identified by the use of forward-looking terminology, such as the terms “anticipates”, “assumes”, “believes”, “can”, “continue”, “could”, “estimates”, “expects”, “forecasts”, “intends”, “likely”, “may”, “might”, “plans”, “should”, “potential”, “projects”, “seek”, “will”, “would” or, in each case, their negative, or other variations or comparable terminology. They include statements regarding Hafnia’s intentions, beliefs or current expectations concerning, among other things, the financial strength and position of the Group, operating results, liquidity, prospects, growth, the implementation of strategic initiatives, as well as other statements relating to the Group’s future business development, financial performance and the industry in which the Group operates.
Prospective investors in Hafnia are cautioned that forward-looking statements are not guarantees of future performance and that the Group’s actual financial position, operating results and liquidity, and the development of the industry and potential market in which the Group may operate in the future, may differ materially from those made in, or suggested by, the forward-looking statements contained in this Report. Hafnia cannot guarantee that the intentions, beliefs or current expectations upon which its forward-looking statements are based, will occur.
By their nature, forward-looking statements involve, and are subject to, known and unknown risks, uncertainties and assumptions as they relate to events and depend on circumstances that may or may not occur in the future. Actual results may differ materially from those expressed or implied in the forward-looking statements due to various factors including, but not limited to:
| • | general economic, political, security, and business conditions, including the development of the ongoing war between Russia and Ukraine and the conflict between Israel and Hamas; |
| general chemical and product tanker market conditions, including fluctuations in charter rates, vessel values and factors affecting supply and demand of crude oil and petroleum products or chemicals, including the impact of the COVID-19 pandemic and the ongoing efforts throughout the world to contain it; |
| • | changes in expected trends in scrapping of vessels; |
| • | changes in demand in the chemical and product tanker industry, including the market for LR2, LR1, MR and Handy chemical and product tankers; |
| • | competition within our industry, including changes in the supply of chemical and product tankers; |
| • | our ability to successfully employ the vessels in our Hafnia Fleet and the vessels under our commercial management; |
| • | changes in our operating expenses, including fuel or cooling down prices and lay-up costs when vessels are not on charter, drydocking and insurance costs; |
| • | our ability to comply with, and our liabilities under, governmental, tax, environmental and safety laws and regulations; |
| • | changes in governmental regulations, tax and trade matters and actions taken by regulatory authorities; |
| • | potential disruption of shipping routes and demand due to accidents, piracy or political events; |
| • | vessel breakdowns and instances of loss of hire; |
| • | vessel underperformance and related warranty claims; |
| • | our expectations regarding the availability of vessel acquisitions and our ability to complete the acquisition of newbuild vessels; |
| • | our ability to procure or have access to financing and
refinancing; |
| • | our continued borrowing availability under our credit facilities and compliance with the financial covenants therein; |
| • | fluctuations in commodity prices, foreign currency exchange and interest rates; |
| • | potential conflicts of interest involving our significant
shareholders; |
| • | our ability to pay dividends; |
| • | technological developments; and |
| • | the impact of increasing scrutiny and changing expectations from investors, lenders and other market participants with respect to environmental, social and governance initiatives, objectives and compliance. |
Additional information about material risk factors that could cause actual results to differ materially from expectations and about material factors or assumptions applied in making forward-looking statements may be found under “Item 3. – Key Information – D. Risk Factors” of Hafnia’s Registration Statement on Form 20-F, filed with the U.S. Securities and Exchange Commission on 1 April 2024. Because of these known and unknown risks, uncertainties and assumptions, the outcome may differ materially from those set out in the forward-looking statements. These forward-looking statements speak only as at the date on which they are made. Hafnia undertakes no obligation to publicly update or publicly revise any forward-looking statement, whether as a result of new information, future events or otherwise. All subsequent written and oral forward-looking statements attributable to Hafnia or to persons acting on Hafnia’s behalf are expressly qualified in their entirety by the cautionary statements referred to above and contained elsewhere in this Report.
Highlights – Q3 and YTD 9M 2024
Financial – Q3
In Q3 2024, Hafnia Limited (the “Company” or “Hafnia”, together with its subsidiaries, the “Group”) recorded a net profit of USD 215.6 million, equivalent to a profit per share of USD 0.42 per share1 (Q3 2023: USD 146.9 million equivalent to a profit per share of USD 0.29 per share). |
The commercially managed pool and bunker procurement business generated an income of USD 7.8 million (Q3 2023: USD 7.5 million2). |
Time Charter Equivalent (TCE)3 earnings were USD 361.6 million in Q3 2024 (Q3 2023: USD 310.3 million), resulting in an average TCE3 of USD 33,549 per day. |
Adjusted EBITDA3 was USD 257.0 million in Q3 2024 (Q3 2023: USD 220.8 million). |
As of 18 November 2024, 71% of the total earning days of the fleet were covered for Q4 2024 at USD 24,004 per day. |
For Q3 2024, Hafnia will distribute a total of USD 194.1 million or USD 0.3790 per share in dividends, corresponding to a payout ratio of 90%. |
Financial – YTD 9M
In YTD 9M 2024, Hafnia recorded a net profit of USD 694.4 million equivalent to a profit per share of USD 1.36 per share1 (YTD 9M 2023: USD 616.8 million equivalent to a profit per share of USD 1.22 per share). |
The commercially managed pool and bunker procurement business generated an income of USD 28.3 million (YTD 9M 2023: USD 28.7 million2). |
Time Charter Equivalent (TCE)3 earnings were USD 1,157.7 million in YTD 9M 2024 (YTD 9M 2023: USD 1,036.8 million), resulting in an average TCE3 of USD 36,330 per day. |
Adjusted EBITDA3 was USD 861.1 million in YTD 9M 2024 (YTD 9M 2023: USD 778.4 million). |
1 Based on weighted average number of shares as at 30 September 2024.
2 Excluding a one-off item amounting to USD 7.4 million in Q3 2023.
3 See Non-IFRS Measures in Note 9.
Highlights – Q3 and YTD 9M 2024 CONTINUED
Market Review & Outlook
In the third quarter of 2024, the Clean Petroleum Products (CPP) trade remained robust, despite a 6% drop in tonne-miles since Q2. High cargo volumes and tonne-miles remain at historical average highs, primarily driven by geopolitical tensions. These tensions have led to more vessels rerouting away from the Suez Canal toward the Cape of Good Hope.
Global oil demand also remained firm in the third quarter, driven by growth in advanced economies. According to the International Energy Agency (IEA), global oil demand increased by 1.1 million barrels per day in the third quarter, driven by global gasoil deliveries, despite a contraction in overall Chinese demand. Furthermore, global oil demand for 2024 remains firm at an average of 102.8 million barrels per day, an increase of 0.9 million barrels from 2023. Despite steady demand, product tanker rates were under pressure in the last part of Q3, mainly due to increased competition from the crude sector. With a seasonally weak crude market, some crude tankers – despite high conversion costs – shifted to carrying refined products. During the quarter, Suezmax and VLCC tankers transported more diesel shipments from the Middle East to Europe, a trade typically handled by LR2s.
As winter approaches, both crude and product markets are expected to strengthen seasonally. Technical challenges and reduced commercial incentives for using crude carriers to carry refined products limit cannibalization, as shown in recent daily loading data, and this drives forward tightness in supply versus demand for the clean products segments. For the first time in history, the product markets will experience a full winter period where seasonal increases in Atlantic demand, partly serviced by the Eastern hemisphere, will exclusively have to route via the Cape of Good Hope rather than Suez. Additionally, improving refinery margins and gradually increasing distances between refineries and end consumers support a strong outlook for earnings in the product sector.
On the supply side, the orderbook-to-fleet ratio is approximately 20% for deliveries through 2028 as of November 2024. However, a growing number of tankers over 20 years old are likely scrapping candidates. These older vessels, with lower utilization rates and frequent involvement in “dark trades”, effectively reduce available tonnage and increase demand for the existing fleet. Furthermore, LR2s comprise over 50% of the new tonnage expected in the next few years, and historically, 70% of LR2 capacity has been absorbed into the dirty petroleum products trade. This is further supported by aged Panamax, Aframax, and large crude tanker fleets where newbuild order books are limited compared to the clean segments. Applying 70% dirty products trading for LR2 newbuild capacity reduces the clean products book-to-fleet ratio to 13%. As a result, the overall supply balance is expected to remain manageable in the coming years.
Looking ahead, the product tanker market outlook is positive. Demand is expected to remain strong, supported by longer transport distances and refinery dislocation. With winter’s seasonal factors and reduced cannibalization from crude tankers, the market is set to benefit from a high-rate environment for product tankers. This will however be impacted if there is normalization of trade through the Red Sea, or further addition of new tonnage.
Fleet
At the end of the quarter, Hafnia’s fleet consisted of 115 owned vessels1 and 15 chartered-in vessels. The Group’s total fleet includes 10 LR2s, 34 LR1s (including three bareboat-chartered in and four time-chartered in), 62 MRs of which nine are IMO II (including two bareboat-chartered in and 11 time-chartered in), and 24 Handy vessels of which 18 are IMO II (including seven bareboat-chartered in).
The average estimated broker value of the owned fleet1 was USD 4,914 million, of which the LR2 vessels had a broker value of USD 649 million2, the LR1 fleet had a broker value of USD 1,288 million2, the MR fleet had a broker value of USD 2,059 million3 and the Handy vessels had a broker value of USD 918 million4. The unencumbered vessels had a broker value of USD 475 million5. The chartered-in fleet had a right-of-use asset book value of USD 19.5 million with a corresponding lease liability of USD 22.3 million.
1 Including bareboat chartered in vessels; six LR1s and four LR2s owned through 50% ownership in the Vista Shipping Joint Venture and two MRs owned through 50% ownership in the H&A Shipping Joint Venture; and excluding Hafnia Pegasus which was classified as an asset held for sale
2 Including USD 353 million relating to Hafnia’s 50% share of six LR1s and four LR2s owned through 50% ownership in the Vista Shipping Joint Venture
3 Including USD 54 million relating to Hafnia’s 50% share of two MRs owned through 50% ownership in the H&A Shipping Joint Venture; and IMO II MR vessels, and excluding Hafnia Pegasus which was classified as an asset held for sale
4 Including IMO II Handy vessels
5 Excluding Hafnia Pegasus which was classified as asset held for sale.
Highlights – Q3 and YTD 9M 2024 CONTINUED
Hafnia will pay a quarterly dividend of USD 0.3790 per share. The record date will be December 6, 2024.
For shares registered in the Euronext VPS Oslo Stock Exchange, dividends will be distributed in NOK with an ex-dividend date of December 5, 2024 and a payment date on, or about, December 17, 2024.
For shares registered in the Depository Trust Company, the ex-dividend date will be December 6, 2024 with a payment date on, or about, December 12, 2024.
Please see our separate announcement for additional details regarding the Company’s dividend.
The Quarterly Financial Information Q3 2024 has not been audited or reviewed by auditors.
Webcast and Conference call
Hafnia will host a conference call for investors and financial analysts at 9:30 pm SGT/2:30 pm CET/8:30 am EST on November 27, 2024.
The financial results presentations will be available via live video webcast via the following link: Click here to join Hafnia’s Investor Presentation on November 27, 2024
Meeting ID: 394 671 548 8
Passcode: Ti3Hc93a
Download Teams | Join on the web
Dial in by phone: +45 32 72 66 19,,929436799# Denmark, All locations
Find a local number
Phone conference ID: 929 436 799#
A recording of the presentation will be available after the live event on the Hafnia Investor Relations Page: https://investor.hafnia.com/financials/quarterly-results/default.aspx.
Hafnia
Mikael Skov, CEO Hafnia
+65 8533 8900
| | USD million | Q1 2024 | Q2 2024 | Q3 2024 | YTD 2024 |
| | Income Statement | | | | |
| | Operating revenue (Hafnia vessels and TC vessels) | 521.8 | 563.1 | 497.9 | 1,582.8 |
| | Profit before tax | 221.3 | 260.8 | 216.8 | 698.9 |
| | Profit for the period | 219.6 | 259.2 | 215.6 | 694.4 |
| | Financial items | (18.9) | (9.9) | (6.3) | (35.1) |
| | Share of profit from joint ventures | 7.3 | 8.5 | 4.1 | 19.9 |
| | | 378.8 | 417.4 | 361.6 | 1,157.7 |
| | Adjusted EBITDA1 | 287.1 | 317.1 | 257.0 | 861.1 |
| | Balance Sheet | | | | |
| | Total assets | 3,897.0 | 3,922.7 | 3,828.9 | 3,828.9 |
| | Total liabilities | 1,541.8 | 1,486.2 | 1,408.7 | 1,408.7 |
| | Total equity | 2,355.2 | 2,436.5 | 2,420.2 | 2,420.2 |
| | Cash at bank and on hand2 | 128.9 | 166.7 | 197.1 | 197.1 |
| | Key financial figures | | | | |
| | Return on Equity (RoE) (p.a.)3 | 38.3% | 44.5% | 37.1% | 39.8% |
| | Return on Invested Capital (p.a.)4 | 27.6% | 31.4% | 26.7% | 29.0% |
| | Equity ratio | 60.4% | 62.1% | 63.2% | 63.2% |
| | Net loan-to-value (LTV) ratio5 | 24.2% | 21.3% | 19.1% | 19.1% |
| | For the 3 months ended 30 September 2024 | LR2 | LR1 | | | Total |
| | Vessels on water at the end of the period8 | 6 | 28 | 60 | 24 | 118 |
| | Total operating days9 | 506 | 2,464 | 5,603 | 2,203 | 10,776 |
| | Total calendar days (excluding TC-in) | 552 | 2,163 | 4,600 | 2,208 | 9,523 |
| | TCE (USD per operating day)1 | 42,829 | 37,564 | 31,928 | 31,047 | 33,549 |
| | Spot TCE (USD per operating day)1 | 42,829 | 37,689 | 32,896 | 31,722 | 34,410 |
| | TC-out TCE (USD per operating day)1 | – | 27,401 | 27,524 | 25,307 | 27,117 |
| | OPEX (USD per calendar day)10 | 8,112 | 8,353 | 8,044 | 8,142 | 8,141 |
| | G&A (USD per operating day)11 | | | | | 1,386 |
Vessels on balance sheet
As of 30 September 2024, total assets amounted to USD 3,828.9 million, of which USD 2,619.2 million represents the carrying value of the Group’s vessels including dry docking but excluding right-of-use assets, is as follows:
| | USD million | LR2 | LR1 | MR6 | Handy7 | Total |
| | Vessels (including dry-dock) | 247.6 | 622.4 | 1,209.5 | 539.7 | 2,619.2 |
1 See Non-IFRS Measures in Note 9.
2 Excluding cash retained in the commercial pools.
3 Annualised
4 ROIC is calculated using annualised EBIT less tax.
5 Net loan-to-value is calculated as vessel bank and finance lease debt (excluding debt for vessels sold but pending legal completion), debt from the pool borrowing base facilities less cash at bank and on hand, divided by broker vessel values (100% owned vessels and asset held for sale).
6 Inclusive of nine IMO II MR vessels.
7 Inclusive of 18 IMO II Handy vessels.
8 Excluding six LR1s and four LR2s owned through 50% ownership in the Vista Shipping Joint Venture, two MRs owned through 50% ownership in the H&A Shipping Joint Venture and Hafnia Pegasus which was classified as an asset held for sale in the statement of financial position.
9 Total operating days include operating days for vessels that are time chartered-in. Operating days are defined as the total number of days (including waiting time) in a period during which each vessel is owned, partly owned, operated under a bareboat arrangement (including sale and lease-back) or time chartered-in, net of technical off-hire days. Total operating days stated in the quarterly financial information include operating days for TC Vessels.
10 OPEX includes vessel running costs and technical management fees.
11 G&A includes all expenses and is adjusted for cost incurred in managing external vessels.
Condensed consolidated statement of comprehensive income
| | | For the 3 months ended 30 September 2024 USD’000 | For the 3 months ended 30 September 2023 USD’000 | For the 9 months ended 30 September 2024 USD’000 | For the 9 months ended 30 September 2023 USD’000 |
| | Revenue (Hafnia Vessels and TC Vessels) | 497,889 | 442,665 | 1,582,779 | 1,443,465 |
| | Revenue (External Vessels in Disponent-Owner Pools) 1 | 221,842 | 208,102 | 753,007 | 524,802 |
| | Voyage expenses (Hafnia Vessels and TC Vessels) | (136,331) | (132,405) | (425,060) | (406,665) |
| | Voyage expenses (External Vessels in Disponent-Owner Pools)1 | (80,324) | (79,506) | (248,807) | (199,267) |
| | Pool distributions for External Vessels in Disponent-Owner Pools1 | (141,518) | (128,596) | (504,200) | (325,535) |
| | | 361,558 | 310,260 | 1,157,719 | 1,036,800 |
| | | | | | |
| | Other operating income | 7,804 | 14,913 | 28,303 | 36,152 |
| | Vessel operating expenses | (70,223) | (71,017) | (208,915) | (201,165) |
| | Technical management expenses | (7,302) | (7,045) | (20,628) | (18,855) |
| | Charter hire expenses | (15,458) | (10,190) | (36,651) | (25,200) |
| | Other expenses | (19,365) | (16,136) | (58,679) | (49,376) |
| | | 257,014 | 220,785 | 861,149 | 778,356 |
| | | | | | |
| | Depreciation charge of property, plant and equipment | (53,516) | (53,135) | (161,904) | (156,341) |
| | Amortisation charge of intangible assets | (108) | (321) | (695) | (976) |
| | Gain/(loss) on disposal of assets | 15,621 | (133) | 15,521 | 56,382 |
| | Operating profit | 219,011 | 167,196 | 714,071 | 677,421 |
| | | | | | |
| | Capitalised financing fees written off | (406) | – | (2,069) | – |
| | Interest income | 4,455 | 4,062 | 11,739 | 14,486 |
| | Interest expense | (9,688) | (23,076) | (38,730) | (73,785) |
| | Other finance expense | (645) | (3,548) | (6,043) | (11,112) |
| | Finance expense – net | (6,284) | (22,562) | (35,103) | (70,411) |
| | | | | | |
| | Share of profit of equity-accounted investees, net of tax | 4,072 | 3,236 | 19,914 | 14,198 |
| | Profit before income tax | 216,799 | 147,870 | 698,882 | 621,208 |
| | | | | | |
| | Income tax expense | (1,164) | (932) | (4,479) | (4,368) |
| | Profit for the financial period | 215,635 | 146,938 | 694,403 | 616,840 |
| | | | | | |
| | Other comprehensive income: | | | | |
| | | | | | |
| | Items that may be subsequently reclassified to profit or loss: | | | | |
| | Foreign operations – foreign currency translation differences | 33 | 15 | 56 | (56) |
| | Fair value (losses)/gains on cash flow hedges | (14,422) | 29,487 | 4,325 | 27,598 |
| | Reclassification to profit or loss | (10,993) | (17,033) | (27,417) | (25,442) |
| | | (25,382) | 12,469 | (23,036) | 2,100 |
| | | | | | |
| | Items that will not be subsequently reclassified to profit or loss: | | | | |
| | Equity investments at FVOCI – net change in fair value | – | – | 1,260 | – |
| | Total other comprehensive (loss)/income | (25,382) | 12,469 | (21,776) | 2,100 |
| | | | | | |
| | Total comprehensive income for the period | 190,253 | 159,407 | 672,627 | 618,940 |
| | | | | | |
| | Earnings per share attributable to the equity holders of the Company | | | | |
| | Basic number of shares | 510,127,660 | 504,856,183 | 510,127,660 | 504,856,183 |
| | Basic earnings in USD per share | 0.42 | 0.29 | 1.36 | 1.22 |
| | Diluted number of shares | 515,362,492 | 506,681,054 | 515,362,492 | 506,681,054 |
| | Diluted earnings in USD per share | 0.42 | 0.29 | 1.35 | 1.22 |
1 “External Vessels in Disponent-Owner Pools” means vessels that are commercially managed by the Group in the Disponent-Owner Pool arrangements that are not Hafnia Vessels or TC Vessels.
Condensed consolidated balance sheet
| | | | | As at 30 September 2024 USD’000 | As at 31 December 2023 USD’000 |
| | Vessels | | | 2,553,028 | 2,673,938 |
| | Dry docking and scrubbers | | | 66,127 | 68,159 |
| | Right-of-use assets – Vessels | | | 19,481 | 34,561 |
| | Other property, plant and equipment | | | 794 | 964 |
| | Total property, plant and equipment | | | 2,639,430 | 2,777,622 |
| | | | | | |
| | Intangible assets | | | 617 | 1,290 |
| | Total intangible assets | | | 617 | 1,290 |
| | | | | | |
| | Joint ventures | | | 80,982 | 60,172 |
| | Other investments | | | 23,531 | 23,953 |
| | Restricted cash1 | | | 13,497 | 13,381 |
| | Loans receivable from joint ventures | | | 62,016 | 69,626 |
| | Deferred tax assets | | | – | 36 |
| | Derivative financial instruments | | | 15,371 | 35,023 |
| | Total other non-current assets | | | 195,397 | 202,191 |
| | | | | | |
| | Total non-current assets | | | 2,835,444 | 2,981,103 |
| | | | | | |
| | Asset held for sale | | | 14,889 | – |
| | Inventories | | | 106,236 | 107,704 |
| | Trade and other receivables | | | 570,811 | 589,710 |
| | Derivative financial instruments | | | 13,155 | 12,902 |
| | Cash at bank and on hand | | | 197,080 | 141,621 |
| | Cash retained in the commercial pools 2 | | | 91,295 | 80,900 |
| | Total current assets | | | 993,466 | 932,837 |
| | | | | | |
| | Total assets | | | 3,828,910 | 3,913,940 |
| | | | | | |
| | Share capital | | | 5,126 | 5,069 |
| | Share premium | | | 1,087,929 | 1,044,849 |
| | Contributed surplus | | | 537,112 | 537,112 |
| | Other reserves | | | (24,549) | 27,620 |
| | Treasury shares | | | (4,278) | (17,951) |
| | Retained earnings | | | 818,909 | 631,025 |
| | Total shareholders’ equity | | | 2,420,249 | 2,227,724 |
| | | | | | |
| | Borrowings | | | 824,956 | 1,025,023 |
| | Total non-current liabilities | | | 824,956 | 1,025,023 |
| | | | | | |
| | Current income tax liabilities | | | 1,721 | 8,111 |
| | Derivative financial instruments | | | 2,539 | 276 |
| | Trade and other payables | | | 319,953 | 385,478 |
| | Borrowings3 | | | 259,492 | 267,328 |
| | Total current liabilities | | | 583,705 | 661,193 |
| | | | | | |
| | Total liabilities | | | 1,408,661 | 1,686,216 |
| | | | | | |
| | Total shareholders’ equity and liabilities | | | 3,828,910 | 3,913,940 |
1 Restricted cash includes cash placed in debt service reserve and FFA collateral accounts.
2 The cash retained in the commercial pools represents cash in the pool bank accounts that are opened in the name of the Group’s pool management company and can only be used for the operation of vessels within the commercial pools.
3 Borrowings include USD 113.0 million of bank borrowings relating to pool financing, of which approximately USD 45.0 million is attributable to working capital advanced to external pool participants and has been adjusted in calculation of Net LTV.
Condensed consolidated statement of changes in equity
| | | Share Capital USD’000 | Share Premium USD’000 | Contributed Surplus USD’000 | Translation reserve USD’000 | Hedging reserve USD’000 | Treasury shares USD’000 | Capital reserves USD’000 | Share-based payment reserve USD’000 | Fair value reserve USD’000 | Retained earnings USD’000 | Total USD’000 |
| | Balance at 1 January 2024 | 5,069 | 1,044,849 | 537,112 | (63) | 39,312 | (17,951) | (25,137) | 3,788 | 9,720 | 631,025 | 2,227,724 |
| | Transactions with owners | | | | | | | | | | | |
| | Purchase of treasury shares and issuance of shares | 57 | 43,080 | – | – | – | (19,685) | – | – | – | – | 23,452 |
| | Equity-settled share-based payment | – | – | – | – | – | – | – | 2,439 | – | – | 2,439 |
| | Share options exercised | – | – | – | – | – | 33,358 | (30,002) | (2,830) | – | – | 526 |
| | Dividends paid | – | – | – | – | – | – | – | – | – | (506,519) | (506,519) |
| | Total comprehensive income | | | | | | | | | | | |
| | Profit for the financial period | – | – | – | – | – | – | – | – | – | 694,403 | 694,403 |
| | Other comprehensive income/(loss) | – | – | – | 56 | (23,092) | – | – | – | 1,260 | – | (21,776) |
| | Balance at 30 September 2024 | 5,126 | 1,087,929 | 537,112 | (7) | 16,220 | (4,278) | (55,139) | 3,397 | 10,980 | 818,909 | 2,420,249 |
| | | | | | | | | | | | | |
| | Balance at 1 January 2023 | 5,035 | 1,023,996 | 537,112 | 29 | 68,458 | (12,675) | (710) | 5,873 | – | 381,886 | 2,009,004 |
| | Transactions with owners | | | | | | | | | | | |
| | Purchase of treasury shares and issuance of shares | 34 | 20,853 | – | – | – | (20,887) | – | – | – | – | – |
| | Equity-settled share-based payment | – | – | – | – | – | – | – | 2,142 | – | – | 2,142 |
| | Share options exercised | – | – | – | – | – | 30,198 | (16,722) | (4,099) | – | – | 9,377 |
| | Dividends paid | – | – | – | – | – | – | – | – | – | (441,262) | (441,262) |
| | Total comprehensive income | | | | | | | | | | | |
| | Profit for the financial period | – | – | – | – | – | – | – | – | – | 616,840 | 616,840 |
| | Other comprehensive loss/(income) | – | – | – | (56) | 2,156 | – | – | – | – | – | 2,100 |
| | Balance at 30 September 2023 | 5,069 | 1,044,849 | 537,112 | (27) | 70,614 | (3,364) | (17,432) | 3,916 | – | 557,464 | 2,198,201 |
Condensed consolidated statement of cash flows
| | | For the 3 months ended 30 September 2024 USD’000 | For the 3 months ended 30 September 2023 USD’000 | For the 9 months ended 30 September 2024 USD’000 | For the 9 months ended 30 September 2023 USD’000 |
| | Cash flows from operating activities | | | | |
| | Profit for the financial period | 215,635 | 146,938 | 694,403 | 616,840 |
| | Adjustments for: | | | | |
| | - depreciation and amortisation charges | 53,624 | 53,456 | 162,599 | 157,317 |
| | - (gain)/loss on disposal of assets | (15,621) | 133 | (15,521) | (56,382) |
| | - interest income | (4,455) | (4,062) | (11,739) | (14,486) |
| | - finance expense | 10,739 | 26,624 | 46,842 | 84,897 |
| | - income tax expense | 1,164 | 932 | 4,479 | 4,368 |
| | - share of profit of equity-accounted investees, net of tax | (4,072) | (3,236) | (19,914) | (14,198) |
| | - equity-settled share-based payment transactions | 775 | 676 | 2,439 | 2,142 |
| | Operating cash flow before working capital changes | 257,789 | 221,461 | 863,588 | 780,498 |
| | Changes in working capital: | | | | |
| | - inventories | 1,455 | (6,372) | 1,468 | (17,511) |
| | - trade and other receivables | 52,346 | 137,297 | 21,064 | (35,044) |
| | - trade and other payables | (26,511) | (18,361) | (42,509) | 148,491 |
| | Cash generated from operations | 285,079 | 334,025 | 843,611 | 876,434 |
| | Income tax paid | (1,025) | (505) | (10,385) | (3,420) |
| | Net cash provided by operating activities | 284,054 | 333,520 | 833,226 | 873,014 |
| | | | | | |
| | Cash flows from investing activities | | | | |
| | Acquisition of other investments | – | (9,999) | (661) | (10,409) |
| | Purchase of property, plant and equipment | (7,700) | (42,417) | (36,373) | (138,322) |
| | Purchase of intangible assets | – | – | (22) | – |
| | Proceeds from disposal of property, plant and equipment | 28,657 | (132) | 28,557 | 143,121 |
| | Proceeds from disposal of other investments | – | – | 2,343 | – |
| | Interest income received | 3,720 | 3,650 | 8,707 | 11,498 |
| | Loan to joint ventures | (4,172) | (15,488) | (11,916) | (15,488) |
| | Repayment of loan by joint venture company | 564 | 23,975 | 22,540 | 23,975 |
| | Dividend received from joint venture | – | – | – | 500 |
| | Equity investment in joint venture | (2,217) | (57) | (2,217) | (57) |
| | Return of investment in joint venture | – | – | 1,360 | – |
| | Net cash provided by/(used in) investing activities | 18,852 | (40,468) | 12,318 | 14,818 |
| | | | | | |
| | Cash flows from financing activities | | | | |
| | Proceeds from borrowings from external financial institutions | – | 45,500 | 30,000 | 246,030 |
| | Repayment of borrowings to external financial institutions | (15,669) | (97,274) | (79,467) | (292,339) |
| | Repayment of borrowings to non-related parties | – | (42) | – | (5,489) |
| | Repayment of lease liabilities | (41,956) | (215,379) | (179,537) | (411,702) |
| | Proceeds from exercise of employee share options | 6 | 21 | 526 | 8,933 |
| | Payment of financing fees | (210) | (2,657) | (1,085) | (3,997) |
| | Interest paid to external financial institutions | (10,430) | (8,316) | (37,406) | (57,037) |
| | Interest paid to a third party | – | – | – | (5,645) |
| | Dividends paid | (207,333) | (128,003) | (506,519) | (441,262) |
| | Other finance expense paid | (1,520) | (3,431) | (6,202) | (9,609) |
| | Net cash used in financing activities | (277,112) | (409,581) | (779,690) | (972,117) |
| | | | | | |
| | Net increase/(decrease) in cash and cash equivalents | 25,794 | (116,529) | 65,854 | (84,285) |
| | Cash and cash equivalents at beginning of the financial period | 262,581 | 312,569 | 222,521 | 280,325 |
| | Cash and cash equivalents at end of the financial period | 288,375 | 196,040 | 288,375 | 196,040 |
| | | | | | |
| | Cash and cash equivalents at the end of the financial period consists of: | | | | |
| | Cash at bank and on hand | 197,080 | 124,814 | 197,080 | 124,814 |
| | Cash retained in the commercial pools | 91,295 | 71,226 | 91,295 | 71,226 |
| | Cash and cash equivalents at end of the financial period | 288,375 | 196,040 | 288,375 | 196,040 |
Cash and cash flows
Cash at bank and on hand1 amounted to USD 197.1 million as of 30 September 2024 (30 September 2023: USD 124.8 million).
Operating activities generated a net cash inflow of USD 284.1 million in Q3 2024 (Q3 2023: net cash inflow of USD 333.5 million).
Cash flows from operating activities were principally utilised for vessel drydocking costs, repayments of borrowings and interest, and payment of dividends to shareholders.
Investing activities resulted in a net cash inflow of USD 18.9 million in Q3 2024 (Q3 2023: net cash outflow of USD 40.5 million).
Financing activities resulted in a net cash outflow of USD 277.1 million in Q3 2024 (Q3 2023: net cash outflow of USD 409.6 million).
Hafnia will target a quarterly payout ratio of net profit, adjusted for extraordinary items, of:
| ● | 50% payout of net profit if Net loan-to-value is above 40%, |
| ● | 60% payout of net profit if Net loan-to-value is above 30% but equal to or below 40%, |
| ● | 80% payout of net profit if Net loan-to-value is above 20% but equal to or below 30%, and |
| ● | 90% payout of net profit if Net loan-to-value is equal to or below 20%. |
Net loan-to-value is calculated as vessel bank and finance lease debt (excluding debt for vessels sold but pending legal completion), debt from the pool borrowing base facilities less cash at bank and on hand divided by broker vessel values (100% owned vessels and asset held for sale).
The final amount of dividend is to be decided by the Board of Directors. In addition to cash dividends, the Company may buy back shares as part of its total distribution to shareholders.
In deciding whether to declare a dividend and determining the dividend amount, the Board of Directors will take into account the Group’s capital requirements, including capital expenditure commitments, financial condition, general business conditions, legal restrictions, and any restrictions under borrowing arrangements or other contractual arrangements in place at the time.
Dividend for Q3
The board has set the quarterly payout ratio at 90% for Q3 2024.
1 Excluding cash retained in the commercial pools.
Coverage of earning days
As of 18 November 2024, 71% of the projected total operating days in Q4 2024 were covered at USD 24,004 per day. The tables below show the figures for Q4 2024, the full year figures for 2024 and the full year of 2025.
Hafnia Fleet1
| | Fleet overview | | Q4 2024 | 2024 | 2025 |
| | Hafnia vessels (average during the period) | | | | |
| | LR2 | | 6.0 | 6.0 | 6.0 |
| | LR1 | | 28.9 | 28.9 | 28.1 |
| | MR2 | | 60.3 | 60.4 | 56.8 |
| | Handy3 | | 24.0 | 24.0 | 24.0 |
| | Total | | 119.2 | 119.2 | 114.9 |
| | | | | | |
| | Covered, % | | | | |
| | LR2 | | 75% | 89% | 2% |
| | LR1 | | 60% | 86% | 7% |
| | MR2 | | 74% | 92% | 11% |
| | Handy3 | | 76% | 94% | 10% |
| | Total | | 71% | 91% | 9% |
| | | | | | |
| | Covered rates4, USD per day | | | | |
| | LR2 | | 28,500 | 47,049 | 24,248 |
| | LR1 | | 22,725 | 40,141 | 28,239 |
| | MR2 | | 23,414 | 31,503 | 22,577 |
| | Handy3 | | 25,909 | 29,884 | 24,908 |
| | Total | | 24,004 | 33,897 | 24,089 |
The coverage figures include FFA positions which are mainly covering a triangulation route from Northwest Europe to the US Atlantic Coast (TC2), followed by a haul from the US Gulf back to the European Continent (TC14) for the MR fleet.
From the beginning of November through November 21, 2024, Hafnia’s pool earnings4 averaged:
| ● | USD 30,196 per day for the LR2 vessels, |
| ● | USD 24,996 per day for the LR15 vessels, |
| ● | USD 21,035 per day for the MR2 vessels, |
| ● | USD 24,793 per day for the Handy3 vessels. |
| | Fleet overview | | Q4 2024 | 2024 | 2025 |
| | Joint ventures vessels (average during the period) | | | | |
| | LR2 | | 4.0 | 3.8 | 4.0 |
| | LR1 | | 6.0 | 6.0 | 6.0 |
| | MR | | 2.0 | 2.0 | 4.0 |
| | Total | | 12.0 | 11.8 | 14.0 |
1 Excludes joint ventures vessels.
2 Inclusive of nine IMO II vessels.
3 Inclusive of 18 IMO II vessels.
4 Covered rates and pool earnings do not include any IFRS 15 load to discharge adjustments
5 Excluding vessels trading in our Panamax pool
6 The figures are presented on a 100% basis. The joint ventures vessels are owned through Hafnia’s 50% participation in the Vista Shipping, H&A Shipping and Ecomar joint ventures.
Coverage of earning days CONTINUED
| | Fleet overview | | Q4 2024 | 2024 | 2025 |
| | Covered, % | | | | |
| | LR2 | | 100% | 98% | 100% |
| | LR1 | | 57% | 85% | 0% |
| | MR | | 100% | 100% | 100% |
| | Total | | 82% | 93% | 57% |
| | | | | | |
| | Covered rates1, USD per day | | | | |
| | LR2 | | 25,721 | 25,662 | 25,721 |
| | LR1 | | 36,216 | 42,818 | – |
| | MR | | 15,610 | 15,525 | 19,878 |
| | Total | | 30,799 | 32,441 | 22,781 |
| | LR2 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
| | Operating days (owned) | 550 | 483 | 544 | 506 |
| | Operating days (TC-in) | – | – | – | – |
| | TCE (USD per operating day) 2 | 38,884 | 52,813 | 60,116 | 42,829 |
| | Spot TCE (USD per operating day)2 | 41,958 | 51,668 | 60,116 | 42,829 |
| | TC-out TCE (USD per operating day)2 | 30,163 | – | – | – |
| | Calendar days (excluding TC-in) | 552 | 546 | 546 | 552 |
| | OPEX (USD per calendar day) | 6,984 | 8,550 | 7,626 | 8,112 |
| | | | | | |
| | LR1 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
| | Operating days (owned) | 2,253 | 2,196 | 2,183 | 2,097 |
| | Operating days (TC-in) | 359 | 350 | 331 | 367 |
| | TCE (USD per operating day)2 | 32,184 | 46,749 | 46,986 | 37,564 |
| | Spot TCE (USD per operating day)2 | 32,532 | 46,454 | 46,986 | 37,689 |
| | TC-out TCE (USD per operating day)2 | 22,377 | – | – | – |
| | Calendar days (excluding TC-in) | 2,300 | 2,275 | 2,275 | 2,163 |
| | OPEX (USD per calendar day) | 7,601 | 8,178 | 8,048 | 8,353 |
| | | | | | |
| | MR3 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
| | Operating days (owned) | 4,442 | 4,355 | 4,484 | 4,550 |
| | Operating days (TC-in) | 920 | 888 | 910 | 1,053 |
| | TCE (USD per operating day)2 | 31,355 | 32,888 | 35,913 | 31,928 |
| | Spot TCE (USD per operating day)2 | 32,710 | 34,237 | 38,077 | 32,896 |
| | TC-out TCE (USD per operating day)2 | 24,951 | 26,211 | 25,674 | 27,524 |
| | Calendar days (excluding TC-in) | 4,541 | 4,550 | 4,550 | 4,600 |
| | OPEX (USD per calendar day) | 8,131 | 7,812 | 8,050 | 8,044 |
| | | | | | |
| | Handy4 | Q4 2023 | Q1 2024 | Q2 2024 | Q3 2024 |
| | Operating days (owned) | 2,207 | 2,184 | 2,183 | 2,203 |
| | Operating days (TC-in) | – | – | – | – |
| | TCE (USD per operating day)2 | 25,459 | 28,305 | 33,358 | 31,047 |
| | Spot TCE (USD per operating day)2 | 25,383 | 28,475 | 34,474 | 31,722 |
| | TC-out TCE (USD per operating day)2 | 26,301 | 26,428 | 25,447 | 25,307 |
| | Calendar days (excluding TC-in) | 2,208 | 2,184 | 2,184 | 2,208 |
| | OPEX (USD per calendar day) | 7,329 | 7,569 | 8,045 | 8,142 |
1 Covered rates and pool earnings do not include any IFRS 15 load to discharge adjustments
2 TCE represents gross TCE income after adding back pool commissions; See Non-IFRS Measures in Note 9.
3 Inclusive of IMO II MR vessels.
4 Inclusive of IMO II Handy vessels.
Notes to the Condensed Consolidated Quarterly Financial Information
These notes form an integral part of and should be read in conjunction with the accompanying condensed consolidated quarterly financial information.
Note 1: Property, plant and equipment
| | | Right-of-use Assets – Vessels USD’000 | Vessels USD’000 | Dry docking and scrubbers USD’000 | Others USD’000 | Total USD’000 |
| | Cost | | | | | |
| | At 1 January 2024 | 199,582 | 3,573,265 | 143,375 | 1,495 | 3,917,717 |
| | Additions | – | 3,324 | 11,996 | 45 | 15,365 |
| | Write-off on completion of dry docking cycle | – | – | (7,946) | – | (7,946) |
| | At 31 March 2024/1 April 2024 | 199,582 | 3,576,589 | 147,425 | 1,540 | 3,925,136 |
| | Additions | 10,836 | 3,784 | 9,184 | 15 | 23,819 |
| | Write-off on completion of dry docking cycle | – | – | (3,501) | – | (3,501) |
| | At 30 June 2024/1 July 2024 | 210,418 | 3,580,373 | 153,108 | 1,555 | 3,945,454 |
| | Additions | 4,753 | 2,340 | 5,358 | 2 | 12,453 |
| | Disposal of vessels | – | (55,615) | (1,973) | – | (57,588) |
| | Reclassification to asset held for sale | – | (19,785) | (1,517) | – | (21,302) |
| | Write-off on completion of dry docking cycle | – | – | (3,040) | – | (3,040) |
| | At 30 September 2024 | 215,171 | 3,507,313 | 151,936 | 1,557 | 3,875,977 |
| | | | | | | |
| | Accumulated depreciation and impairment charges | | | | | |
| | At 1 January 2024 | 165,021 | 899,327 | 75,216 | 531 | 1,140,095 |
| | Depreciation charge | 10,711 | 34,393 | 8,605 | 84 | 53,793 |
| | Write-off on completion of dry docking cycle | – | – | (7,946) | – | (7,946) |
| | At 31 March 2024/1 April 2024 | 175,732 | 933,720 | 75,875 | 615 | 1,185,942 |
| | Depreciation charge | 10,537 | 34,835 | 9,146 | 77 | 54,595 |
| | Write-off on completion of dry docking cycle | – | – | (3,501) | – | (3,501) |
| | At 30 June 2024/1 July 2024 | 186,269 | 968,555 | 81,520 | 692 | 1,237,036 |
| | Depreciation charge | 9,421 | 34,949 | 9,075 | 71 | 53,516 |
| | Disposal of vessels | – | (43,941) | (611) | – | (44,552) |
| | Reclassification to asset held for sale | – | (5,278) | (1,135) | – | (6,413) |
| | Write-off on completion of dry docking cycle | – | – | (3,040) | – | (3,040) |
| | At 30 September 2024 | 195,690 | 954,285 | 85,809 | 763 | 1,236,547 |
| | | | | | | |
| | Net book value | | | | | |
| | At 30 September 2024 | 19,481 | 2,553,028 | 66,127 | 794 | 2,639,430 |
Note 1: Property, plant and equipment CONTINUED
| | | Right-of-use Assets – Vessels USD’000 | Vessels USD’000 | Dry docking and scrubbers USD’000 | Others USD’000 | Total USD’000 |
| | Cost | | | | | |
| | At 1 January 2023 | 187,730 | 3,698,658 | 138,001 | 1,369 | 4,025,758 |
| | Additions | – | 1,592 | 408 | 55 | 2,055 |
| | Disposal of vessels | – | (164,795) | (7,481) | – | (172,276) |
| | Reclassification to assets held for sale | – | (60,321) | (1,729) | – | (62,050) |
| | At 31 March 2023/1 April 2023 | 187,730 | 3,475,134 | 129,199 | 1,424 | 3,793,487 |
| | Additions | – | 86,445 | 7,405 | 4 | 93,854 |
| | Disposal of vessels | – | (58,712) | (3,340) | – | (62,052) |
| | Write-off on completion of dry docking cycle | – | – | (1,575) | – | (1,575) |
| | At 30 June 2023/1 July 2023 | 187,730 | 3,502,867 | 131,689 | 1,428 | 3,823,714 |
| | Additions | – | 33,966 | 8,400 | 51 | 42,417 |
| | Write-off on completion of dry docking cycle | – | – | (2,727) | – | (2,727) |
| | At 30 September 2023/1 October 2023 | 187,730 | 3,536,833 | 137,362 | 1,479 | 3,863,404 |
| | Additions | 11,852 | 36,432 | 9,618 | 16 | 57,918 |
| | Disposal of vessels | – | (60,321) | (1,696) | – | (62,017) |
| | Write-off on completion of dry docking cycle | – | – | (3,638) | – | (3,638) |
| | Reclassification of assets held for sale to disposal of vessel | – | 60,321 | 1,729 | – | 62,050 |
| | At 31 December 2023 | 199,582 | 3,573,265 | 143,375 | 1,495 | 3,917,717 |
| | | | | | | |
| | Accumulated depreciation and impairment charges | | | | | |
| | At 1 January 2023 | 119,826 | 970,339 | 58,791 | 239 | 1,149,195 |
| | Depreciation charge | 11,232 | 33,153 | 7,204 | 72 | 51,661 |
| | Disposal of vessels | – | (111,179) | (2,072) | – | (113,251) |
| | Reclassification to assets held for sale | – | (49,015) | (482) | – | (49,497) |
| | At 31 March 2023/1 April 2023 | 131,058 | 843,298 | 63,441 | 311 | 1,038,108 |
| | Depreciation charge | 11,292 | 33,250 | 6,935 | 68 | 51,545 |
| | Disposal of vessels | – | (46,287) | (1,852) | – | (48,139) |
| | Write-off on completion of dry docking cycle | – | – | (1,575) | – | (1,575) |
| | At 30 June 2023/1 July 2023 | 142,350 | 830,261 | 66,949 | 379 | 1,039,939 |
| | Depreciation charge | 11,335 | 34,572 | 7,158 | 70 | 53,135 |
| | Write-off on completion of dry docking cycle | – | – | (2,727) | – | (2,727) |
| | At 30 September 2023/1 October 2023 | 153,685 | 864,833 | 71,380 | 449 | 1,090,347 |
| | Depreciation charge | 11,336 | 34,494 | 7,474 | 82 | 53,386 |
| | Write-off on completion of dry docking cycle | – | – | (3,638) | – | (3,638) |
| | Disposal of vessels | – | (49,015) | (482) | – | (49,497) |
| | Reclassification of assets held for sale to disposal of vessel | – | 49,015 | 482 | – | 49,497 |
| | At 31 December 2023 | 165,021 | 899,327 | 75,216 | 531 | 1,140,095 |
| | | | | | | |
| | Net book value | | | | | |
| | At 31 December 2023 | 34,561 | 2,673,938 | 68,159 | 964 | 2,777,622 |
| a. | The Group organises the commercial management of the fleet of product tanker vessels into eight (2023: seven) individual commercial pools: LR1, Panamax, LR2, MR, Handy, Chemical-MR, Chemical-Handy and Specialized (2023: LR1, LR2, MR, Handy, Chemical-MR, Chemical-Handy and Specialized). Each individual commercial pool constitutes a separate cash-generating unit (“CGU”). For vessels deployed on a time-charter basis outside the commercial pools, each of these vessels constitutes a separate CGU. |
Management is required to assess whenever events or changes in circumstances indicate that the carrying value of these CGUs may not be recoverable. Management measures the recoverability of each CGU by comparing its carrying amount to its ‘recoverable value’, being the higher of its fair value less costs of disposal or value in use (“VIU”) based on future discounted cash flows that the CGU is expected to generate over its remaining useful life.
Note 1: Property, plant and equipment CONTINUED
As at 30 September 2024, the Group assessed whether these CGUs have indicators of impairment by reference to internal and external factors. The market valuation of the fleet of vessels, as appraised by independent shipbrokers, is one key test performed by the Group.
Based on this assessment, alongside with other industry factors, the Group concluded that there is no indication that any impairment loss is needed for the 9 months ended 30 September 2024 (9 months ended 30 September 2023: USD Nil).
| b. | The Group has mortgaged vessels with a total carrying amount of USD 2,360.3 million as at 30 September 2024 (31 December 2023: USD 2,491.8 million) as security over the Group’s bank borrowings. |
| c. | There were additions of USD 15.6 million to right-of-use assets – vessels – as at 30 September 2024 (9 months ended 30 September 2023: USD Nil). |
| d. | As at 30 September 2024, the Group has time chartered-in six MRs and two LR1s with purchase options; and two MRs and one LR1 without purchase options. These chartered-in vessels are recognised as right-of-use assets.
The Group has firm charters in place up till 2025 for these vessels. The current and next average purchase option price are as follows: |
| | | USD’000 | Current average purchase option price 1 | Next average purchase option price | |
| | | LR1 | 41,833 | 41,333 | |
| | | MR | 31,776 | 31,393 | |
The time chartered-in days and average time charter rates for these vessels are as follows:
| | | | | | 2024 | 2025 | |
| | | TC in (Days)2 | | | | | |
| | | LR1 (with purchase option) | | | 732 | 425 | |
| | | LR1 (without purchase option) | | | 323 | – | |
| | | MR (with purchase option) | | | 2,196 | 1,314 | |
| | | MR (without purchase option) | | | 636 | – | |
| | | | | | | | |
| | | Average TC in rate (USD/Day) | | | | | |
| | | LR1 (with purchase option) | | | 16,125 | 16,294 | |
| | | LR1 (without purchase option) | | | 17,314 | – | |
| | | MR (with purchase option) | | | 19,100 | 19,100 | |
| | | MR (without purchase option) | | | 17,250 | – | |
| | | | As at 30 September 2024 USD’000 | As at 31 December 2023 USD’000 |
| | Current | | | |
| | Bank borrowings | | 173,641 | 174,004 |
| | Sale and leaseback liabilities (accounted for as financing transaction) | | 64,082 | 57,305 |
| | Other lease liabilities | | 21,769 | 36,019 |
| | Total current borrowings | | 259,492 | 267,328 |
1 The purchase option price decreases by a fixed amount per year, or on a pro-rata basis based on individual contract terms. Prior notice period of three to four months are required before exercise of options. The value of the purchase options amount to USD 129 mil as at the end of the current reporting period.
2 Based on firm charter period and does not include optional periods exercisable by Hafnia.
Note 2: Borrowings CONTINUED
| | | | As at 30 September 2024 USD’000 | As at 31 December 2023 USD’000 |
| | Non-current | | | |
| | Bank borrowings | | 350,364 | 398,507 |
| | Sale and leaseback liabilities (accounted for as financing transaction) | | 474,080 | 622,174 |
| | Other lease liabilities | | 512 | 4,342 |
| | Total non-current borrowings | | 824,956 | 1,025,023 |
| | | | | |
| | Total borrowings | | 1,084,448 | 1,292,351 |
As at 30 September 2024, bank borrowings consist of ten credit facilities from external financial institutions, namely USD 473 million, USD 374 million, USD 216 million, USD 84 million (DSF), USD 84 million, USD 39 million, USD 40 million, USD 303 million, and two borrowing base facilities (31 December 2023: USD 473 million, USD 374 million, USD 216 million, USD 106 million, USD 84 million, USD 39 million, USD 40 million, USD 303 million and two borrowing base facilities respectively). These facilities are secured by the Group’s fleet of vessels.
The table below summarises key information of the bank borrowings:
| | | | | Outstanding amount USD m | Maturity date |
| | Facility amount | | | | |
| | USD 473 million facility | | | 93.7 | |
| | - USD 413 million term loan | | | | 2026 |
| | - USD 60 million revolving credit facility | | | | 2026 |
| | USD 374 million facility | | | – | |
| | - USD 100 million revolving credit facility | | | | 2028 |
| | USD 216 million facility | | | 134.3 | 2026 |
| | USD 84 million facility (DSF) | | | 81.7 | 2029 |
| | USD 84 million facility | | | 51.2 | |
| | - USD 68 million term loan | | | | 2026 |
| | - USD 16 million revolving credit facility | | | | 2026 |
| | USD 39 million facility | | | 16.3 | |
| | - USD 30 million term loan | | | | 2025 |
| | - USD 9 million revolving credit facility | | | | 2025 |
| | USD 40 million facility | | | 36.3 | 2029 |
| | USD 303 million facility | | | – | |
| | - USD 303 million revolving credit facility | | | | 2029 |
| | Up to USD 175 million borrowing base facility Up to USD 175 million borrowing base facility (with an accordion option of up to USD 75 million) | | | 52.7 59.7 | 2024 |
The table below summarises the repayment profile of the bank borrowings:
| | | | | For the financial year ended 31 December 2024 | For the financial year ended 31 December 2025 |
| | Repayment profile USD’000 | | | | |
| | USD 473 million facility | | | 7,248 | 28,992 |
| | USD 216 million facility | | | 3,150 | 12,600 |
| | USD 84 million facility (DSF) | | | 2,158 | 8,633 |
| | USD 84 million facility | | | 1,560 | 6,240 |
| | USD 39 million facility | | | 834 | 15,464 |
| | USD 40 million facility | | | 718 | 2,874 |
| | Up to USD 175 million borrowing base facility Up to USD 175 million borrowing base facility (with an accordion option of up to USD 75 million) | | | 53,000 60,000 | – |
Note 2: Borrowings CONTINUED
As of 30 September 2024, bank borrowings of joint ventures consist of six credit facilities (31 December 2023: six credit facilities) from external financial institutions. The table below summarises key information of the joint ventures’ bank borrowings:
| | | | | Outstanding amount USD m | Maturity date |
| | Facility amount | | | | |
| | Vista Shipping joint venture | | | | |
| | USD 51.8 million facility | | | 30.7 | 2031 |
| | USD 111.0 million facility | | | 77.2 | 2032 |
| | USD 89.6 million facility | | | 82.4 | 2033 |
| | USD 88.5 million facility | | | 84.8 | 2031 |
| | | | | | |
| | H&A Shipping joint venture | | | | |
| | USD 22.1 million facility | | | 17.3 | 2026 |
| | USD 23.5 million facility | | | 19.5 | 2028 |
| | | | | For the financial year ended 31 December 2024 | For the financial year ended 31 December 2025 |
| | Repayment profile USD’000 | | | | |
| | Vista Shipping joint venture | | | | |
| | USD 51.8 million facility | | | 863 | 3,453 |
| | USD 111.0 million facility | | | 1,850 | 7,400 |
| | USD 89.6 million facility | | | 1,318 | 5,271 |
| | USD 88.5 million facility | | | 1,229 | 4,917 |
| | | | | | |
| | H&A Shipping joint venture | | | | |
| | USD 22.1 million facility | | | 368 | 1,473 |
| | USD 23.5 million facility | | | 368 | 1,470 |
As at 30 September 2024, the finance lease liabilities consist of various facilities provided by external leasing houses. The vessels under these facilities are legally owned by the leasing houses and leased back to Hafnia. The maturity dates of the facilities range from 2029 to 2033.
The carrying amounts relating to the 12 LR1 vessels was USD 332.1 million (31 December 2023: USD 354.2 million), 9 CTI vessels was USD 161.1 million (31 December 2023: USD 276.9 million), and other finance leases was USD 44.9 million (31 December 2023: USD 48.5 million).
Interest rates
The weighted average effective interest rates per annum of total borrowings, excluding the effect of interest rate swaps, at the balance sheet date are as follows:
| | | | As at 30 September 2024 | As at 31 December 2023 |
| | Bank borrowings | | 7.0% | 6.7% |
| | Sale and leaseback liabilities (accounted for as financing transaction) | | 7.1% | 7.4% |
Carrying amounts and fair values
The carrying values of the bank borrowings and finance lease liabilities approximate their fair values as they are re-priceable at one to three months intervals.
