Hafnia: Q4 2022 report and a new quarterly dividend

Analyst Comment

Hafnia reported its Q4 2022 results this morning, rounding off the year with a strong quarter cementing Hafnia’s record year amid strong product tanker market conditions.

FY 2022 Hafnia realised TCE Income of USDm 1,346.7 (FY 2021 USDm 402,9), EBITDA of USDm 1006.9 (FY 2021 USDm 151.8), and a net profit of USDm 751.6 (FY 2021 USDm -55.5). This signals year on year TCE Income growth of 234% and EBITDA growth of 563%.

Hafnia fell a little short of consensus analyst estimates which were for TCE Income of USDm 1.382 and EBITDA of USDm 1.025 were as Net Income of USDm 749 was more in line.

Hafnia also announced a dividend of USD 0.3157 per share, supporting the three previous interim dividends which totaled USD 0.4873 per share, equal to USDm 243.7 taking total dividends FY 2022 to USDm 402 equal to around USD 0.80 per share or approximately NOK 8.30 - reflecting a yield of 13% at today’s share price. Analyst consensus on the dividend front was for USD 0,82 per share.

Hafnia’s result was driven by strong market conditions as product tanker rates surged on the back of EU sanctions against Russia which redirected oil product flows increasing the average distance vessels must travel (Tonne-miles).

Looking ahead to 2023, Hafnia expects market conditions to remain strong, supported by continued sanctions on Russia, particularly the EU embargo on Russian clean petroleum products (CPP), which came into effect on the 5th of February 2023. The implementation of the embargo and the market’s ability to circumvent the sanctions will likely be a key influence behind spot rates during 2023.

Hafnia also announced in its Q4 2022 earnings that it has reduced its positioning in the spot market, choosing to lock in some of the elevated product tanker rates with cover contracts. Hafnia now has 27% of its fleet covered for 2023.

As some of the numbers including dividends came a little short of expectations shares of Hafnia drop around 5% in todays market. However the share is still up more than 25% this year and has gained around 225% the last 12 months.

Join us tomorrow Wednesday the 1st of March at 13.30 CET when we host an event with CEO of Hafnia Mikael Skov. Please sign up here: https://www.inderes.dk/videos/hafnia-presentation-of-q4-quarterly-report-2022

HC Andersen Capital receives payment from Hafnia for a Digital IR/Corporate Visibility subscription agreement. /Philip Coombes and Rasmus Køjborg, CFA at 15.22CET on 28/02-2023