Hafnia (NYSE:HAFN) reported fourth-quarter and full-year 2024 results that management described as another year of “strong results,” even as product tanker market conditions moderated late in the year. CEO Michael Skov said the company’s performance underscored its “operational resilience and ability to generate value through market cycles,” while executives pointed to a constructive 2025 outlook supported by sanctions-related tightening and an aging global fleet.
Q4 and full-year financial performance
Management also highlighted contributions from adjacent fee-generating activities. The company’s pool management and bunkering-related businesses generated $6.9 million in Q4 and $35.2 million for 2024, supporting adjusted EBITDA of $131.0 million in the quarter and $992.0 million for the year.
Operationally, Hafnia generated an average TCE per day of $22,692 in Q4 based on 10,293 earning days. Operating expenses averaged $8,131 per day across 9,430 calendar days, with management emphasizing ongoing cost discipline and peer benchmarking.
Fleet position and asset value discussion
Skov reiterated Hafnia’s scale in product and chemical tankers, describing the company as an owner and operator of more than 200 vessels across eight pools and a platform that includes technical management, chartering services, pool management, and bunker procurement. As of December 31, 2024, Hafnia’s owned and chartered fleet comprised 125 vessels with a net asset value (NAV) of approximately $3.8 billion, equating to an NAV per share of about $7.63 (or NOK 86.34). The owned fleet’s average age was cited at 9.1 years, compared to an estimated global product tanker fleet average of roughly 14 years.
During Q&A, Skov addressed questions about recent asset price declines, saying the company was not seeing “a lot of activity” in the sale-and-purchase market and suggesting valuation marks may be “theoretical” in the absence of transactions, as sellers are reluctant to accept lower prices and buyers seek greater visibility amid uncertainties.
Capital allocation: buybacks, dividends, and leverage
Management repeatedly returned to the gap between Hafnia’s share price and its NAV as a driver of buybacks. Skov said the dislocation in late 2024 created an opportunity to enhance shareholder returns. In January, Hafnia completed its buyback program, repurchasing approximately 14.4 million shares at roughly 70% of NAV for an average of $5.33 per share, totaling $76.7 million.
Executives explained that buybacks are treated within the company’s broader shareholder distribution framework. Capital used for repurchases in December was deducted from total payout before declaring Q4 dividends. Hafnia reported a net loan-to-value (LTV) ratio of 23.2% at quarter-end, up from the prior quarter primarily due to declining vessel values.
For the quarter, Hafnia declared an 80% payout ratio. After deducting $49.1 million used for buybacks in December, the company said it would distribute $14.6 million, or $0.0294 per share, in dividends for Q4. Including buybacks, total shareholder payout for 2024 reached $640.8 million, representing a payout ratio of 82.8%.
In response to investor questions, management said treasury shares from buybacks would “indeed be canceled.” Executives emphasized that dividends remain the primary tool under Hafnia’s distribution policy, while buybacks are used opportunistically when shares trade at what the board views as a significant discount to intrinsic value.
Market outlook: rates, Red Sea impact, and sanctions
VP Commercial Soren Winter said product tanker markets remained strong through the first nine months of 2024, supported by high cargo volumes and longer ton-miles as vessels rerouted around the Cape of Good Hope amid Red Sea disruption. In the fourth quarter, rates came under pressure due to increased “cannibalization” from crude tankers and a dip in clean petroleum product loadings tied to refinery maintenance and lower margins. Winter noted loadings rebounded significantly in December and said the trend continued into the first quarter, helped by reduced cannibalization and higher export volumes from the U.S. Gulf.
Winter also presented analysis on a potential Red Sea reopening, arguing the net impact on ton-mile demand could be “marginal” if cross-hemisphere trade volumes return toward historical averages. During Q&A, he reiterated that regaining displaced east-to-west flows could leave the market “very close to a status quo” versus late 2024 conditions.
A major theme was the expanding role of sanctions in shaping supply and demand. Winter said the January listing of an additional 183 vessels (sanctioned) could significantly impact the balance, with potential spillover benefits for clean tankers by reducing crude tanker cannibalization and tightening clean supply. Management cited early evidence that China and India had announced they would exclude sanctioned tankers from imports and said imports from Russia, Iran, and Venezuela to China and India had declined in February. Skov added that Iran exports appeared down meaningfully versus January based on partial-month data discussed on the call.
Coverage and earnings visibility into 2025
Hafnia said rates were recovering in early 2025 and provided coverage statistics as of February 13, 2025. The company had covered 67% of Q1 2025 earning days at an average rate of $23,989 per day and 25% of full-year 2025 earning days at an average of $24,062 per day. Van Ecktelt referenced scenario analysis on the slide deck suggesting potential 2025 net profit estimates in the range of approximately $300 million to $400 million, noting this would be below the prior three years but still “robust.”
Sustainability and new joint venture
Skov said Hafnia is integrating sustainability principles across operations and highlighted fleet renewal efforts. He noted the delivery in January of Ecomarc as GONE, the first of four dual-fuel methanol chemical IMO2 MR newbuilds ordered through a joint venture with Socatra of France, describing the vessels as able to run on conventional fuel and methanol.
He also announced the launch of Seascale Energy, a joint venture bunker procurement entity between Hafnia Bunker Alliance and Cargill Pure Marine Fuels, aimed at improving cost efficiency, transparency, and access to sustainable fuel innovations.
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