CEO Statement
The product tanker market was counter-cyclically firm throughout the third quarter, driven by continued growth in clean petroleum products exports, especially from the Middle East. This market strength carried in the fourth quarter, further supported by improved refining margins and the ongoing impact of sanctions, which are still causing inefficiencies and disruptions in trading routes.
I am pleased to announce that Hafnia delivered strong earnings for the quarter. In Q3, we achieved a net profit of USD 91.5 million, our strongest quarterly result so far in 2025, with our fee-based businesses generating USD 7.1 million. This quarter’s performance also reflects the impact of several vessels undergoing drydocking, resulting in approximately 740 off-hire days. This was around 230 days higher than expected, mainly due to dry dock delays and two vessels undergoing special cargo tank recoating during the quarter. While several vessels are scheduled for drydocking in the coming quarters, we expect off-hire days to decrease to around 440 in the fourth quarter.
At the end of the third quarter, our net asset value (NAV ) stood at approximately USD 3.4 billion, translating to an NAV per share of about USD 6.76 (~NOK 67.55). Our net Loan-to-Value (LTV) ratio improved from 24.1% in the second quarter to 20.5%, supported by strong operational cashflows. Approximately USD 100 million was used to repurchase vessels under sale-and-leaseback financings. In addition, vessel market values have also recorded a slight uptick compared to the previous quarter.
I am pleased to announce a payout ratio of 80% for the third quarter. We will distribute a total of USD 73.2 million or USD 0.1470 per share in dividends.
As part of our ongoing fleet renewal policy, we divested four older vessels during the period. In September, we sold the 2011-built MR vessel Hafnia Andromeda, followed by the sale of the 2012-built MR Hafnia Lupus in October, and both the 2010-built MR Hafnia Nordica and 2011-built MR Hafnia Taurus in November.
In September, we announced a preliminary agreement to acquire 14.45% of Torm shares from Oaktree. This was followed by a binding share purchase agreement, and we are now waiting for the appointment of a new independent board chair at TORM before we can complete the acquisition.
As winter approaches, seasonal demand is expected to strengthen the oil market, supporting higher earnings through increased tonne-mile activity and operational delays. The early part of the fourth quarter has been marked by significant geopolitical developments, including ongoing sanctions and regional conflicts that continue to alter global trade flows. Recent positive developments, such as the USA-China agreement to suspend special port fees for one year, and the ceasefire between Israel and Gaza, should help reduce market fragmentation and contribute to greater stability across trade routes.
On the supply side, the outlook for product tankers remains constructive. Fleet growth in Q3 was minimal despite ongoing newbuild deliveries, largely due to vessel sanctions and the transition of LR2s into dirty trading, which has tightened availability in the clean product segment. In addition, tonnage supply crossing over from the crude sector has decreased sharply into Q4, supported by a strong crude tanker market.
Overall, these dynamics point to a favourable environment for product tanker earnings through the rest of the year, with solid fundamentals likely to carry into early 2026.
As of 14 November 2025, 71% of our Q4 earning days are covered at an average of USD 25,610 per day, and 15% of the earning days for 2026 are covered at USD 24,506 per day.
As we approach the end of 2025, we remain encouraged by the continued strength of the product tanker market. Despite global uncertainty, I believe Hafnia is well-positioned for the future we and expect our operational cash flow breakeven in 2026 to be below USD 13,000/day. We will continue to exercise financial discipline and pursue opportunities that strengthen our competitive position.
- Mikael Skov, CEO Hafnia