HAFN

Welcome to this presentation of Hafnia's Q1 results, just released this morning. Welcome to the CEO, Mikael Skov. It's a pleasure to have you. We have approximately 30 minutes to go through. I hope you will ask a lot of questions. Please do it in the chat. I'll make sure that they are put forward to Mikael in this brief conversation. My name is Tue Østergaard. I'll be the moderator. Just a small status, Hafnia has today a value of $4.2 billion. This year, the stock is up 43%, which is quite good. It's a pleasure to have this opportunity to go through the results, but also to look forward to all these geopolitical stuff that's going on. I hope that we can discuss that, Mikael.

Absolutely.

Good. Welcome. I'll control the slides, and if you have any questions, please put them forward. We will start with this agenda, a brief Q1 introduction, then, of course, into the industry review and outlook, then, of course, a financial summary. We'll put most emphasis on the industry review. Mikael, I think I'll let you talk now. Please, go ahead.

Thank you so much, Tue, and thank you for having Hafnia and giving us the chance to give a short presentation of the Q1 2026, which, as you've probably seen by now, was an extraordinary good quarter. We announced the numbers here this morning. As you can see from the screen, we secured a net profit of $179.7 million, which is historically high, even in concept of shipping. The good news is, as we've said as well, that Q2 already looks to be a better quarter, stronger quarter than Q1. I think all in all, we've been extremely satisfied with what we've seen so far, and it looks like the market in general has more legs and that there are some structural interesting things that, in our view at least, means that we're probably going to see a stronger tanker market throughout the year, this year.

Thank you. When it comes to Hafnia, for those that are not totally familiar, the short version is that we are a product tanker company that owns and charters in financially committed around 118 ships. They're all product tankers, so that means they are transporting refined oil such as gasoline, diesel, or jet fuel, et cetera. We also operate 60 ships on behalf of other owners that have decided to outsource the commercial management to us. All in all, we operate around 180 ships on a global basis, which obviously gives us the opportunity of positioning the ships around the world depending on how we see and analyze the market and the demand for ships. Hopefully by that, we try to optimize on the earnings of all these vessels.

Perfect. Just a question on the average age of your fleet, 9.6

Yeah

How is that compared to the rest of the industry?

The 9.6 average age should be seen, or compared to rather the average industry of about 14 years. There's no doubt that it's a modern fleet. At least for Hafnia, it's important that we maintain a fleet of modern ships. That's not just for the earning potential, but also because basically, when we talk about decarbonization and reducing fuel consumption and emissions, all these new modern ships are a lot more efficient than when you look at ships that are 15 years old.

Good. I think we'll cover that in more detail. I think you paid out 88% of your net profit last year, and then it seems like it's continuing.

It does. Our dividend policy relates to net LTV, which, by the end of Q1, was just above 20%. In the range of 20% to 30%, we're paying out 80%. As you say, that has been like consistently over the last 17 quarters that we paid out dividend. I think it just shows again that there's a strong focus from our side on delivering shareholder value and returning capital to shareholders when things are going well.

You came onto the New York Stock Exchange last year. Has this changed in any way so that you are considering more share buybacks, or are you very comfortable with this dividend policy?

Yeah. I think Well, we kind of talk about this obviously every quarter, depending on where the share price is. Does it make sense to buy back shares or not? Fundamentally, we have a dividend policy, and any share buyback that we should consider going forward would always be in addition to the existing dividend policy. We're not swapping between the two. We are rather adding on. If we should decide to buy back shares, that will be in addition to our existing dividend policy.

Okay. Let's perhaps, this is historic numbers now, Mikael. That's the way it is.

Yeah.

We need to look forward a little bit.

Yeah.

Let's go into the industry because there's so many things happening as we speak. Maybe you could set the scene for how Hafnia is positioned in a global turmoil.

Yeah. Obviously when you have geopolitical turmoil, it's unfortunately often the situation that there is humans at risk, and that's also what we've seen this time around. The whole crisis in the Strait of Hormuz have caught up and tied up a lot of seafarers and vessels inside the Strait, which of course is not by any means a desirable outcome for our business. That being said, I think at least as far as we're concerned, the extra ton-mile that we have seen, i.e., that refined products travel longer than before because of these geopolitical events, has meant that demand for ships have gone up. This is kind of the primary reason why we've seen a very strong market in Q1 and now continuing into Q2.

What I would like to highlight on this slide here is just so people understand a bit of the context of where the oil market is that we are seeing a very rapid reduction of inventories on a global basis. This is something that we all need to be aware of, and I think the ordinary person will see this just from trying to order plane tickets and other things, that there is a shortage of fuel in general, and inventories are being brought down to levels where there is a real concern that in some areas of the world, you could run out of oil, at least when you compare to the current demand that we're seeing today.

This is one very important thing, is that this crisis in Hormuz, if it continues for a lot longer, we will not be able to have the same demand for oil that we had before the crisis. Prices will continue to go up, and they will go up to the point where people start to use less because there won't be enough oil for all the demand scenarios that we saw before the crisis.

Okay. We'll go into a couple of details and allow us to do that because I think this is very important for Hafnia's case for investors to understand these drops in global oil demand and also the inventories. Could you please elaborate a little bit about that, Mikael, please?

Basically what we are seeing is that because we are short of all the oil that would traditionally come out of the Arabian Gulf, it has meant that we've had to try to find oil from alternative places or use oil from existing inventories. We have seen a combination of the two. As I mentioned earlier, inventories are being drawn down. There is no way that the current demand can be met, unless we see an end to the crisis in the Middle East. This is the consequence that inventories are being drawn down. What you're seeing is that oil now travels longer for that reason.

What would normally be, say, loading in the Middle East and going to, for instance, Europe or going to the Far East, is now loading in the U.S. Gulf, which has doubled its distance and going all the way out to the Far East. This is the fundamental change in trading patterns that we have seen and kind of one of the main reasons why the market has become so strong.

This illustrates the drawdown in inventories, which seems massive.

Yeah

I must say. It's difficult for normal investors like me to envisage, but maybe you could put some words on this. How long time do you think it will take to recover these inventories? I think that's also important to understand.

There's no doubt it will take time to recover the inventories, for two reasons. One is that even in a normalization of the situation, in the Middle East, there's been damage to about 2 million barrels per day of production of oil in general, out of a total of five. That means before you can even start to export and produce, you need to repair, which can take at least two to three quarters, the damaged infrastructure to get the oil production and export back to where it was.

Yeah, Mikael. I think that's illustrated on this slide. Maybe you can talk on that.

Exactly

because that's very important.

I think this is a thing that may be overlooked a little bit, is that we are not going back to normal, even if there is a settlement or peace plan for the Strait of Hormuz. It will take time to get the production back online. That's one thing. That in itself will take, as I said, two to three quarters probably, when you listen to the local analyst in the area. The second question is, of course, is the world happy with just going back to where it was in terms of holding inventory of oil, or has this scared off so many areas in the world that people will look to build up higher inventories than before to make sure that if something should happen again, that you're not running short very quickly thereafter?

When you listen to various parts of the world, and there seems to be kind of shared opinion, but I think in general terms, there are certain areas of the world that will definitely come back with a demand for higher inventory build than what they saw before the crisis. That means more production, more transportation, more demand for tanker vessels, in the aftermath of a potential end of the conflict.

Okay. Maybe you could also describe the difference between crude and your market product here, because I think that's also very important to understand for investors that what are the key differences in your opinion?

I think the main key difference is that we are delivering a finished product to the consumers. That means that when you have uncertainty, when you have, as we're seeing now, geopolitical events like these, then what you normally see is that people immediately go for the finished product. The difference here is that before crude oil ends up with a consumer, first it has to go from where it's been taken up in the ground, basically to a refinery. It has to be refined before it becomes to refined oil product, and then it can go to the consumer. It's a long process depending on how long crude has to travel. Being the product tank business, we see the effects immediately because people immediately want to have the finished product.

When you look at the development in tanker markets in general, it is often the product tanker market that reacts first to any form of uncertainty.

Okay. I think this is a very interesting slide, by the way, because nobody has sort of quantified this before, in my opinion. I think that's something people can read. Then, of course, these daily loadings, which I also think is a part of this explanation.

Yeah. We are definitely seeing the effect of less oil being produced in the Middle East and loaded on board ships. This is really what this is showing, right? That we are seeing less and less oil on board ships, but what we are seeing is that ships are sailing longer with that same amount of oil. That in combination is why you're seeing a stronger freight market, is basically, as I said earlier, ships are sailing longer with the same amount of oil. It is a fact that because there is less oil and less oil loading, it means that oil consumption will also have to come out of inventories, and that's kind of the dynamic effect that we are seeing at the moment.

Perhaps this oil on water, you have described it as, maybe put a few words on this.

Yeah. I think this kind of reflects really what we have seen, right? That oil on water is coming down. It is a result of the lack of cargoes that we've seen in the Middle East. There's no doubt that this current situation and this slide here describes very well why we don't believe that this can go on for a very long time. If this continues for another month, there will be serious shortage of fuel around the world, and prices will go so high that it will kill demand, and we're going to have to see a totally different consumer pattern than what we've seen before.

Okay.

When we look at the crisis, I think what you're seeing here is one of the most important parts, right? Which is basically that we don't believe that consumers can continue as we do today, unless you're willing to pay off exorbitant levels for the oil that you're going to be using.

Yeah. You have a basic scenario that demand for oil will come down, basically. You agree with IEA about that. They have been out recently saying-

Yeah

that they think that the demand side will come down.

Yeah.

Yeah.

If there's no change to the current situation.

Yeah. Mikael, perhaps a tricky question, but if you're an investor in Hafnia and you see that suddenly the U.S. and Iran agree on, not an immediate opening of Hormuz, but an opening, what would you think?

You mean in terms of what will happen afterwards?

Yeah. What will happen?

This is probably our most likely working assumption, is that there will be some kind of solution going forward. I think what will happen is that, once there's a safe transit of Strait of Hormuz, you will take the close to 200 tankers, and they will all kind of get out, and you will start normalize the trade, so to speak. The oil price has to find its level. Undoubtedly, the oil price will come down. As the oil price starts to drop, we believe that people will start looking at rebuilding the inventories. If a conflict reignites in some form and shape, the last thing you want is to come back and be short of oil. We think the inventory rebuild will drive the tanker market for not just this year, possibly also into next year.

It will take a long, long time to rebuild inventories even to the levels they were before this war started.

Okay. This is the ton-mile effect you have described. You travel simply, you travel longer.

Yeah.

I think it's difficult for normal investors just to put this in perspective, because we've had this before under other circumstances, but maybe you can put it into a relative context here about previous times where you've had seen the same.

I think one have to look at these statistics kind of in two ways. One is the actual voyage length, which goes up, like when you have situations like this, where can we get the oil from? It's only available in the American Gulf. All right, we have to send the ship there, transport the cargo to wherever it should go. The second part is the uncertainty. The uncertainty where the ship is going. Even though you go longer, when you're adding on security as to where's the ship going to go, that kind of means that the supply of vessels, potential supply of vessels for the next cargo, becomes very uncertain because I don't know where my ship is going. Cargoes are being sold.

It goes towards Asia, but it could go to Singapore, it could go to New Zealand, it could go to the U.S. West Coast. Theoretically is you get voyage length, but you also get voyage uncertainty, which means that you have less ships available around the world for the next cargo because too many vessels are so uncertain that you can't say that we will be there in two weeks time ready to load the next cargo. Those are the two things in combination that creates extra demand for ships.

Okay. We've discussed previously in this, the Russian and the dark fleet and maybe you have some comments about this. It doesn't seem to change very much, actually. Sometimes the U.S. allow Russian transport, sometimes they don't.

Yeah.

Sometimes the U.K. does. I think for investors it's very difficult to find a way around to understand these moves. Maybe you can shed some light.

I understand why people are confused because I think, even so are we sometimes, right? The routes are not clear, and they keep on changing. I would say what we are seeing, though, is that a lot of that dark fleet and sanctioned tonnage that has been transporting Russian oil are being used less and less. What we are seeing is there is a reducing utilization of the dark fleet in general. There is a lot of damage to the Russian infrastructure, on refineries and production of oil. We've seen production drop as well. As far as we can see, it has kind of lived a little bit its own life.

I think the main thing to watch as an investor here is, of course, that if in connection with Russia or Ukraine or the Strait of Hormuz, there is any form of agreements on peace, and, let's say normalization of Russian export of oil again, what that would technically mean is that Russian oil would become compliant, which means there would be more oil for the normal market, which is where Hafnia and all of our peers are in. All the sanctioned ships, all the vessels in the dark fleet will suddenly not have anything to sail with because basically all of that current cargo will move into the compliant market. That's a feature to watch out for as well, is that any form of softening and normalization of that will send more oil into the compliant transportation market, which would be a positive.

There's so many interesting slides, but I found this one particularly interesting, Mikael, because we've done these interviews for approximately five years now, and through this period it's been crazy what you have experienced. I think this illustrates quite well how many things you've been through. Somehow I have the feeling that this Hormuz thing is more structural than the others. Am I right in that, or is that a true bullish assumption?

No, I would kind of concur with that. I think that is true. Even before these six years, we've had wars as well, right? Those were different because they were between international alliances, and actually, we were able to have ships going up and down through the area of the Arabian Gulf, even when there was wars going on because there were international protection of our ships, and oil kept on flowing despite the fact that there was war and warlike operations. This time around is very different, right? Because it has become a weapon in a big conflict. To take out one of these absolute main production areas in the world of oil and gas is a serious threat.

I think structurally what will happen is that lots of countries and areas will have to consider, can we live with the risk of this happening again, or should we try to focus on production in different areas? As I said earlier, make sure that inventories are kept at a much higher level than before to ensure that you're not as vulnerable in the future as you have been this time around. That's one thing. I think what's interesting here, if you look at the slides in general, is really the structurally aging fleet.

I know we have another slide on this as well, but I do think what's really interesting to see now is that this illustrates why we have been positive for the tanker business for a long, long time, is that we've had a long period of under-investing in ships, and we're now catching up a little bit, but we are by no means catching up and trying to, say, bridge the gap between ships that are becoming older than 20 years and new build. I know we have a slide later on and we'll be kind of taking that.

Yeah. If we can find it. Yeah.

Yeah.

I think this is the one we're looking for.

This is the one.

Yeah.

Exactly. Yeah. I think this is really what I think investors should keep on looking at, is that even with today's order book, we will be running shorter ships by the end of this decade for sure. A lot of those ships are also in the dark fleet, a lot of them are poor quality. We need renewal without any doubt, and we are by no means exceeding the demand for tankers yet. Of course, if ordering goes on for five years in a row, that's a different story. Right now, as you can see from this slide, we are by no means filling the gap of demand that is needed going forward.

Good. Let me just flip through a few things here. I'm sorry for doing this because there's many questions, but I think this is one that gives investors particular good insights into how you are seeing your company as we speak.

Yeah.

Q1 was very good. Q2 is going to be better.

Yeah.

This is also saying something about the covered rates you have, and if you put them forward to Q3 and Q4, how it will look. Can you comment on this in more in detail, perhaps?

Well, as you may have seen from the report today, we already covered more than 70% of the second quarter at about $46,000 per day.

Yeah.

We are close to 40% of the balance of the year as well. Yeah, I think what it really tells us is that by what we have covered already, which is a combination of spot fixes that have already been concluded, but also a hedging ratio, which now is getting close to 30% on a 12-month basis. Those two in combination means that the uncertainty for the year is a lot less than what we've seen previously. I think our coverage base is going up and is still at very, very high numbers. I think that's kind of the fundamental to take away from here, and our view is that the full year this year will be, already we can see a very, very strong year.

Yeah.

The uncertainty is, without any doubt, what happens in the case that this conflict continues to the point where inventories are being drawn so low and prices are going so high that demand will come down.

Yeah. I think, Mikael, let's take some questions. There's a lot of questions here, so I'll just take them one by one, if I may.

Yeah.

The first one is, how many ships or vessels have Hafnia caught in the Hormuz Strait as of today?

We have one vessel in there.

Okay.

We've had only one vessel basically from the beginning. We consider ourselves very fortunate and lucky that it was only one vessel, and everybody's fine. We've changed the crew more than once, so that's pretty much under control, which is good.

Okay. There's a question on the status of TORM. You acquired a stake recently, and you have also said that you made quite a decent profit on this in connection Q1, perhaps. Can you share anything? I know it's sensitive, but whatever you can share I think would be helpful.

Well, as you say, we're super happy with the investment so far, obviously, because it's gone up since we bought the shares. I think from an investment perspective, it's obviously been super profitable. Our view on consolidation has not changed at all. Our view remains that when you look at companies in our sector with a market cap of, say, $5 billion-$6 billion and above, they trade at a lot better ratio, net asset values towards the price of the stock than if you are at a $2 billion-$3 billion market cap company. These are facts and I think, for us that would be a significant value optic for our shareholders or any combined shareholders that would participate in something like this.

We have not changed our view on what we think is right, but as we also say, sometimes you've got to be patient and sometimes you have to let time work a little bit with you. Our intentions have not changed as far as this is concerned.

Okay. There's a question on your debt situation and whether it would be more sensible, given rising interest, to focus on reducing your debt than paying out dividends. How do you see this situation?

Yeah, no, I kind of understand that concern, right? I think fundamentally, we are reducing debt all the time. That's step number 1. I think we have extremely low interest costs in general, also when we compare to the peers. Our view is probably that despite the fact that we had a net LTV of around 20%, obviously this is at a very high level, and freight environment and price asset environment, that the 20% is applicable in a normalized mid-cycle thing that will probably be closer to 30%-35% maybe. We believe that in an asset-heavy industry like ours, that it's not efficient use of capital not to have any debt whatsoever. We kind of feel that where we are now with a normal amortization and payback of our debt, that this is kind of a good place to be.

We don't feel that running a business with no debt whatsoever, being so asset heavy as we are, is the right model.

Next question is, does Hafnia have any plans on starting to transport LNG, or will you leave that to your sister company at BW LNG?

No, we don't have any plans of that. I would say that's not really related to any sister companies or anything else. That's just for the time being. We still feel that demand for refined oil will be strong for many, many years going forward. What we are seeing, though, is that we have expanded a little bit into the easy chemical sector. Where we are transporting biofuels and other easy chemical products, and we probably feel that's a good balance between refined oil and easy chemicals because there's a longer pathway for the easy chemicals than maybe for refined oil in general. LNG, that is not something we've considered.

That's not on the board. There's a question here, and I'll read it out. The U.S. has become a net exporter of crude for the first time in 50 years, with export reaching a record high. How structural do you view this shift in Atlantic Basin trading flows, and how is your fleet positioned to capture it?

It's a very good question, by the way. Currently, we're overweight vessels in the Western Hemisphere. We have been able actually to profit a bit from not the crude oil side, but also the refined oil side, which has been very active out of the U.S. Gulf. One thing is the crude, but the important part for us has been U.S. Gulf exports of refined oils, of which there have been a heavy increase as well. A lot of these barrels have gone a long way. I mean, we transported naphtha from the U.S. Gulf all the way via Cape of Good Hope out to Japan, just to give one example. Long voyages. I think we've been well-positioned to take advantage of exactly that situation.

Okay. Then I think a final question, which is very relevant, is that the Strait of Hormuz has been closed since early March, and the IEA's base case assumes a reopening in early June. That will then lead to two to three months of normalization. What is your assessment of this timeline, and what scenarios do you have working with internally based on that?

Yeah. I think obviously, we can all guess on what we think about this conflict. We're working under the assumption that for the time being, it's about making sure that you have flexibility in your positioning of the fleet. In other words, we don't want to be caught up being isolated in a place where suddenly there's no oil export or nothing to transport with. What we're trying to do now is to build in flexibility so that we can easily switch from the Western Hemisphere to the Eastern Hemisphere should we suddenly have more demand coming out of the AG in connection with an end of the conflict.

That's kind of how you need to work with it, because nothing is guaranteed in any form and shape. I can say that our view is that in a reopening scenario, you may see a little bit of quietness for a while until production ramps up. Our main scenario here is that the inventory restocking is going to be massive, and it's going to require a lot of tankers afterwards to do that, and it will probably drag the tanker market forward strongly, for the next at least 12 months.

Then a final comment, perhaps a little bit technical, but I read in your release that you are now describing Complexio, one of your inventions in Hafnia. That's the second time I've seen this mentioned. Can you just briefly mention what that is and what is the purpose of this within Hafnia?

First of all, it's true that we have been a co-founder, so to speak, right? I would not take credit for anything.

Okay, fair enough.

been in the development of it. That's experienced people that have done that. Basically, it has now been underway for more than three years, and as you say, we're now rolling it out and have rolled it out in certain areas of Hafnia. It basically is a technology that sits inside your business, and basically understands all the processes, workflows that is within Hafnia. It's not an external large language model like Claude or anything else. It sits inside your own security. No one else have access to it. It uses the OpenAI models to help create automated automation, which basically means that things that normally would be a manual work, you come in, you read emails, you send stuff around.

Okay

can now be automated completely. It's a big way and change of working, I think what the way to look at it is that, and why we are very positive is that there's so much risk by using external models and upload stuff to models in the open landscape, whereas Complexio actually offers a solution where you're not sharing any sensitive data with anyone outside your own business.

We look forward to hearing more about the potential impact for Hafnia on this. Mikael, thank you very much for your time. I hope everybody got answered all their questions. Thank you for the questions and follow on. If you have any questions more, you can find on Investor Relations in Hafnia, I'm sure. Thank you very much, Mikael.

Thank you.

Hello, welcome to this Q4 presentation of Hafnia. My name is Tue Østergaard, I'm with HC Andersen, I'll be today's moderator. I'd like to welcome you, Mikael Skov, CEO of Hafnia, for this presentation. We'll have around 30 minutes, I hope you have a lot of questions. Please put them in the chat, then I'll make sure that they are put through. Market cap today is $3.7 billion, up 30% this year, obviously a lot of things happening within Hafnia and the world. I look forward to having this presentation with you, Mikael. Welcome.

Thank you.

As always, we'll start with a very brief introduction, then go into the industry dynamics. Then, of course, we'll also today discuss consolidation and in the end. Please let me know if you have any questions. Mikael, I'll take control of the slides, but please go ahead. Over to you.

Thank you so much. I think, just at least for the ones that are maybe not so familiar with Hafnia, that we are a product tanker company that owns and controls close to 200 vessels overall, including our own vessels, but also third-party vessels, and is into the transportation of refined oil products. Exactly. Basically, it's the core activity is exactly that. We have the majority of our earnings from the so-called spot market. Hafnia is very much a company which follows the trends in the oil market and the pricing and tries to maximize the earnings on the back of having most of the ships in the spot market.

We do also, in addition to that, have some adjacent businesses, things that we've developed over the years. As I mentioned, we are managing other ship owners' vessels commercially. Smaller owners that don't have a massive organization can outsource the commercial management to us. On the back of that, we have roughly 80 vessels over the year that we operate on behalf of others. We also have procurement services that we do in terms of providing fuel for the ships that are sailing in a massive Bunker Alliance in a joint venture with Cargill called Seascale. That's another example of how consolidation can also happen in a more softer tone.

It may not be financially interlinked, but corporations and alliances actually can give us quite a meaningful earning on the fees, but also a lot of economy of scale advantages on the actual operation. The final bit under the active management strategy, on the right side, the final graph, I think if you were to define the DNA of Hafnia, since we're only 15 years old, is that it has been a, and is, a culture of innovation, but also active management. We've been growing the business without taking a lot of risk, but more trying to find and capture the bottom of cycles where we've been investing and trying to harvest when we are on the top of the cycle.

We've done a lot of M&A, combination of businesses, acquisitions of larger scale ships, all depending on really on whether we think it creates value or not. The fundamental philosophy is that try to be active when markets are low and things are cheap, and then as they are now, you try to harvest and you pay back through dividends, capital to the shareholders.

Perfect. Let's go into, yeah, take a brief look at Q4, Mikael, please.

Well, I mean, Q4 was the strongest quarter of last year, I think I can also say that those of you that listened to us the last time or previous time, we hadn't expected the quarter to be so strong. That I have to say. I mean, we saw there were certain trends, but not to the level that we've seen. The market has been extremely strong in Q4 and is continuing that strength even further now into Q1. I'm happy to say that we made $109.7 million in net profit, and decided to pay out again, 80% of that in dividend.

Our dividend policy is linked to the net loan-to-value that the company has, and by the end of Q4, that was just below 25%. Between 20% and 30%, the payout of dividend is 80%. If it drops below 20%, then the payout will go up to 90%. That's the dividend policy we have at the moment.

Yeah, I think we actually have a slide on that. This is the one, right?

Yes, correct.

Do you expect any changes to that? I mean, you did some share buybacks in Q1, but that will not be the normality. Is that correct?

That's true. If we decide, and we do debate it, you know, every quarter, of course, but if we decide to do share buybacks, that will come on top of the regular dividend policy. It won't be a mixture of the two, it will be dividend, as always, so the policy is firm, and then on top, potential share buyback should we so decide.

Yeah. Cool, if you have any questions to the this is the same. We've repeated this many times, that this is going to be the same for a long, long time.

Yeah.

Let's see if there's any questions to this, Mikael. Do you wanna put a few words on this outperforming peers slide?

Well, I think obviously, we have a lot of performance metrics, and I think one should have, because there are many areas where you can, you know, you can either improve or change how you do things in terms of either cost side or revenue side in general. I think at the end of the day, you know, it all comes back to shareholder returns. I think that captures all of this, and I think that's why we, you know, what we like to, obviously, to show this, but also compare it to peers, that we know that we have the highest shareholder returns in the peer group. As you can see here on over three years, 75.3%.

That's for us is one of the most important metrics to focus on. You know, I think particularly in shipping, which is very cyclical, and which means of course that when things are good as they are right now, cost has a tendency of creeping up. Yeah, I think for at least in Hafnia, what we've been trying to do is to have fixed costs at a lower level. We are definitely cost-wise in the low end, that includes even the D&A part. Then we'd rather pay a bit more extra out in terms of bonuses and other things when things are going well, so we can control it.

The fixed cost base is low, and as you can see on the right side, when we compare our own total cost picture with the peers' average, there is a difference. I think in a very volatile shipping market, you know, the only thing you don't want to have is a very high cost base. When things go as you didn't expect, and they do that quite often, you wanna make sure that your cost base can carry you through even the low parts of the cycle without you coming into any trouble.

Cool. Mike, going into the industry review and outlook, I think there's many details here. Why don't we start with a sort of more, what is your current broad outlook of the industry as you see it?

Maybe we can kind of take it in two phases. If you start looking at, say, Q4 and Q1 that we're in now, there is no doubt that the very strong crude market in general has been pulling a lot of vessels from the clean, refined oil transportation into their market. In other words, we have lost a lot of ships that have gone into a the crude market transportation. That has kept the supply of ships down, so that is one thing on the supply side. Supply side has been almost zero growth. We'll get into that in a minute.

Then of course, on the demand side, what we have seen is that because of the geopolitical uncertainty, you know, there are just a lot of changes in terms of ton-mile, a bit of inventory build as well. We've seen, for instance, that the situation with the Venezuelan crude has been super positive for the market in the U.S. Gulf area. Suddenly, oil that was restricted and kind of moving more on a sanctioned shadow of dark fleet suddenly got released and is now moving into the compliant fleet, which again, has put more demand into the regular market, and has made that market in the Caribbean, the U.S. Gulf area, super strong.

I would say it's been a combination of those factors for sure, that, you know, the supply side is always very important in shipping to monitor, right. That has been a big factor.

Yeah. Let's go into a few slides here.

Yeah.

One of the key things I said to you ahead of this meeting was that all the charts are pointing up.

Yeah.

It seems to me that we've broken out of some territory, and, we are now actually approaching the peers of 2022, 2023, where you had super-profits.

Yeah.

Maybe put a few words on that.

Yeah, I think this illustrates very well, of course, that there is a lot of oil on the water, and that of course, means that ships are occupied. That is one thing. I think the, there's no doubt that both the dirty petroleum market and the clean market is now having massive amounts of oil out for a few different reasons. There has definitely been an element of concern that you could get some kind of disruption of oil supply, particularly in the Middle East.

I think we have to factor in a little bit that if export out of the Middle East has gone up a bit, to make sure that oil is out before potentially something should happen between the U.S. and Iran, and a closure potentially of the Strait of Hormuz into the Arabian Gulf. I also think in general, we've had very positive refinery margins in many parts of the world. Of course, that means that refiners are making money by refining crude oil into products, and that pushes a lot of refined products out as well.

I think there is no doubt that when we look at the market now and the strength we're seeing here in Q1, it is definitely getting very close to what we saw back in the hey years of 2022, 2023, and even 2024. I think as a final comment to this, I think what I have mentioned before on these calls and which is still the case, is there are a couple of new ships coming into the market, particularly this year and next year.

Yeah.

When we look at the overall supply picture, all of the vessels that are currently sanctioned and out of the market, etc., if they all disappeared overnight, we would have a massively strong market for a very long time. That's the key question. I know we have a slide on that as well.

Yeah, yeah. Mike, before we get into that, Iran, for example, let's say that something happens in Iran, how will that impact Hafnia?

Well, it kind of depends on how that situation would develop in the Arabian Gulf. I mean, if you go back to the Iran-Iraq situation and Kuwait as well, you know, back in the days, even when there was a war going on, there were transportation of oil going in and out because they were happening in different areas of the Arabian Gulf. I think it's really all about if the Arabian Gulf gets closed down, that is one very extreme scenario, which basically means that no oil can come out of the area.

Yeah.

That, I think, in itself, would be. I mean, I mean, one thing, of course, is the oil price will go through the roof. It also means that we would probably have a different problem to deal with, which is that where would you get the replacement from?

Yeah.

In that case, I would say that that's a, I don't think that is a likely scenario at all. You know, it's something that is there. Otherwise, I think oil will finds its way. I mean, I think if you look at any war and any conflict that has been around the world, in some way, we always manage to find ways of getting the oil out of the water, either through convoy or protection of military. You know, this one is a very uncertain one for sure, right? Depends on how much it spreads out in the territory.

Okay. You described the ton-mile situation, that it is actually going up quite a lot.

Yeah

Judging from this slide. What causes that?

Well, it is really, I mean, it is a combination of a few things, right? It is what happens normally in a market is that when you start, as we've seen now, to have a crude oil market that is super strong and starts pulling ships one way, that obviously means that you have less ships in your own area. It also means that the demand for crude means that there is a demand for refinery. That means, again, you refine more, you put more cargo out on the water. A lot of what we're seeing here is there's more cargo on the water, but there's also inventory built both directly but also indirectly.

We are seeing that that oil, obviously, whether it's on board a ship or it goes into storage terminal, it does reflect, of course, that inventories are building up a little bit. That's one side of it. The other side is that oil demand has surprised to the strong part. I mean, oil demand is showing more increased strength than what most people expected.

Yeah.

You know, we've come from a winter, and we are in a winter where the cold areas around, you know, the world has been pretty extreme. There's no doubt the seasonality is playing in as well here. We are in, you know, in Q4 and Q1, are the strongest quarters seasonally for transportation of refined oil.

Yeah. Okay. Let's. I think there's many questions, so I'll try and limit myself here, but I find this one particularly interesting. I think it would be worthwhile for you to comment on this. The reason I find it interesting is that we have difficulties understanding this. What is sanctioned? What is gray market? You're actually referring to a number of 900 vessels here.

Yeah

Which must be a huge part of the fleet in total. If they suddenly change status from gray onto sanctioned, that must be a huge change in the market.

It is, and I think the graph we're showing here is a big part of why markets are strong, is that we have lost a lot of ships that have gone into becoming either sanctioned, or trading in the so-called dark fleet. Which again, means that they're transporting oil, in closed, transportation patterns between countries like Russia, China, and India previously, and without proper insurance, without having to comply with international regulation. It's non-compliant trade when you are in the dark fleet. The same goes for sanctioned tonnage. Whenever you become a sanctioned tonnage, you're obviously restricted in how you can trade. Yes, there's two things about the sanctioned tonnage, that we need to be aware of. One is that they've gone up in numbers to massive numbers, close to 1,000.

What we're also seeing is that a lot of the sanctioned/dark fleet is being used less and less.

Okay.

You start by assuming that you have a ship, and the ship does something different. What we're seeing now is that they're not being utilized as much as they did, for instance, a year ago. Indirectly, we are seeing ships disappearing from the compliant market into the non-compliant market, but they're not loading and carrying as much as a normal ship would do. That means a lot of oil that previously moved on sanctioned dark fleet tonnage is now being moved on compliant tonnage, which means more demand again for the normal market.

Very interesting. I'm just going to skip to this one, because.

[crosstalk] Yeah.

That. You have told me previously on these calls that, there will be a lot of supply coming in, but it's the net supply we need to discuss, because that's going to determine the market.

Yeah.

This actually shows that despite coming, a lot of supply coming in, the net supply is very low.

Exactly. As you say, when we had these conversations before last year, I mean, everybody was focusing on, if you look at the right graph, the one that says percentage of clean deadweight development of an order book saying about 5% increase was the number. Everyone said, "5%, that is too much, 'cause demand is not increasing 5%, so the market has to go down." What people were missing was that you have an order book, you have a number, but in reality, when you look at the ships that are being delivered.

I mean, we could see and so could others, that all these so-called LR2 ships, they appear as a product tanker, but for 80% of those ships actually ended up as carrying crude because they are, and this comes a bit technical, but an LR2 vessel is equal to an Aframax vessel carrying crude, so you can carry both. They delivered and left our market immediately. This is not a surprise, and it doesn't mean that they come back. It's just a function of ship owners that have a long track record carrying crude, would often choose an option to coat the Aframax vessel, so it appears on a list as a product tanker because it has a tank coating inside, as a product carrier. In theory, when it comes out, it will trade in a different market.

So this is, as you say, I mean, we're down to below, way below 1% last year, which again means that we virtually had no increase of ships, but still a steady demand increase, for less ships, basically.

Yeah. You expect this to continue because, of course, the order book is picking up, the rates are very strong and you will see more ordering. That's, I mean, at least for 2029, 2030.

Yeah. Yeah. I think you will. You know, the thing is now, if you look at the order books in general, as you say, if we want to order a product tanker today, you know, it will be delivered in 2029. So far, the rush in new builds and for the shipyards have been to build gas carriers, container ships, smaller container ships, not so much tankers. If you ask a shipyard today, "What would you rather do?" They would not come up with building a product tanker or dry bulk carrier as their first choice, 'cause they don't make a lot of money on that.

Right.

There is a push towards other, which has been good for us. I think this year, the number is not gonna be equally low as what we saw last year, because the order book is slightly tweaked towards medium-range ships and not LR2 ships as last year. We'll still see transition from clean to dirty, but I don't think it will not be the same amount of LR2s as we saw last year.

No. If you look at the industry, and for investors' purpose, I mean, the order book in comparison to containers or something else is still low.

Yeah.

Of all shipping markets, the product tank is actually one of the lowest order book. Am I right in that, or?

Yeah, dry bulk is lower than product tankers.

Okay. Okay.

That's the only one.

Okay. Yeah, there's many things we can add to, but I think in the instance of time, I think we can go into the consolidation thing. There will be people asking you about what's going on on consolidation. Of course, maybe you can sort of summarize, you have bought some shares in TORM, the way you see this. I know you don't want to go into details, fair enough, but maybe on a broader context, talk about consolidation as a theme.

Yeah. Yes, as you say, yeah, so we bought 14% of TORM, and which, by the way, of course, for the moment, has been a very good investment. It's been like, if you like, another geared play into the product tanker market and given us more exposure, which, of course, comes out pretty well, in the current situation with the strong market. That's just on the investment side. I mean, our thoughts about consolidation, I think we have been pretty vocal, over the years, right?

I think when you look at companies like Hafnia, you know, with market caps to say, on average, say, around $3 billion-$3.5 billion, and you, and you look at the pricing of companies of our size in the stock market versus the pricing of similar tanker companies that are twice the size, there is a significant difference. If we had double Hafnia, so to speak, you know, our view is that on a multiple expansion basis, this could mean as much as between, you know, $600 million, $700 million, $800 million, to $1 billion, really, in valuation, if you just adjust it for how you see other bigger companies trading in our similar market as us.

Whether we like it or not, the shareholders in general have made a decision that having larger companies with larger free flow gives better liquidity, and if you're a good-performing company, they will give you a higher pricing in general. That's one of the key elements. You know, the synergies on the cost side, obviously, is an obvious. You know, again, for like-minded companies, you cannot rule out that there could easily be between, you know, $60 billion-$80 billion of synergies a year, right? You know, on a theoretical basis, between equal companies in looking at cost structures.

I think as a final note, if you look at the future for what we do, we transport oil, transport oil that goes into a consuming part, but also, you know, part of the energy complex. That is changing, right? The energy complex will change. Not now, not in five years, maybe not even in 10 years, but it will change. When you get to that point, we don't believe that being small is the perfect position to be in. You're gonna have to invest in new ships, different ships. You're gonna need a strong current business to finance your transition over years into something else. For that, we think having a large-scale company listed with a good track record, that will enable you to slowly but surely make that transition, rather than suddenly being stuck with a small company, old ships, too early.

That's kind of how we look at it, and I think, you know, my job and my colleagues' job is to do one thing only, that is to find ways of creating more shareholder value. That's how we built Hafnia from zero in 2010, and I think that's any management's job is to continuously and positively explore whatever opportunities are there and take the conversations and see if it makes sense or not before you make decisions. That's how we would approach it.

Fair enough. I think that's all we. Yeah, I, that's as I hoped for. Thank you, Mike. The only thing I wanted on the operational side or financial side to divest in this, I actually think this is a very good slide because it gives you some indications of where the market is in terms of 2026.

Yeah.

Just to remind everybody, the EBITDA was $200 – $560 in 2025. If you look at the analyst consensus, it's right now $590. I'm just, that's a very, very low growth. I don't expect you to comment on it. I just want to make the point that it seems to me, given what you just described of the market, that this is low.

No, and, I mean, given where we are in today's market, that is public news, and it's out there, you saw the rates that we have put out. I mean, and you have those in the bottom, right?

Yeah.

In the middle as well, for Q1 cover rates, what that would mean, obviously, you know, people would put some seasonality into it. I mean, my best guess is, honestly, I think on the analyst side, now everyone is coming out with their result. My best guess is that they will have to up them a little bit, quite frankly.

Yeah. We'll see about that. Mike, can we dig into some of the questions?

Yes.

There's a lot of questions about TORM, of course, and I think we've answered them. I perceive that. Then there's some questions about the. Sorry, we're diverting in all kinds of directions here, but is some of Hafnia's LR1s or LR2s trading crude?

Some of the LR1s are, yes. That they are trading as Panamaxes in the Caribbean Sea. That's one of the strongest markets basically we're seeing at the moment, with rates around $60,000 so far around Q1, that has been super attractive.

Okay. There's a question here: What is behind your less positive market outlook, especially with mixed market outlooks from peers for 2026?

I think that as a fundamental part, you know, we look at the supply side and see that as I said, it's tweaked a bit more towards MRs this year than last year, so there will be more supply coming in, even though we'll lose a little bit. The big question in all of this is the sanctioned fleet and the dark fleet. This is the big question. If we continue to see that those ships reduce the utilization down, or even better, that most of the oil they carry is being forced out in the compliant trade, we're gonna have a massive year this year. This is the big question mark. At the moment, it's a very difficult one to assess because it's a political game.

Is the U.S. gonna come down hard on Russia and try to prevent Russian oil from being transported on these type of ships? A lot of that alternative oil will move on compliant fleet. That's why we've been a bit cautious on that part, but, quite frankly, also, we, you know, what we're seeing now at the moment is a market that is so strong on crude and products that, you know, it's kind of a bit dangerous also to be taking too much away from the macro analysis, which for us would still be that things will then drop off a little bit coming out of the high season.

There's a question here, I'm trying to rephrase it. Sort of asking you, sort of your earnings power through 2026 and 2027, and which specific market or fleet-related factors that you as an investor should be focused on here?

I think what to focus on is actually that the product tanker market is 1 market. I think sometimes people have a tendency of trying to pick out 1 size versus the other, and that is not how it will work. Technically, you need to think about the product tanker market as 1 market. You can either have 3x25,000 tons of cargo on an LR2 ship, or you can have 1x25,000 on an MR ship, kind of, you know, easily explained. Which means that if freight goes away crazy in one size, you can split up the cargos and move them down into smaller sizes and save freight. Therefore, they're always intercorrelated. I wouldn't say that there is.

You know, it's very seldom that they don't work somehow in tandem. I think fundamentally in the product tanker sector, if you put everything together, the medium range area is the area where there's most liquidity. Depending on how you want to invest, what you want to get into, you can say that you can buy and sell an MR ship in the morning. It's an easier sector to go in and out, liquid rather than LR2, for instance, or the smaller ships. I think that matters as well. Liquidity is obviously important for people getting in and out of a business.

Okay, I just, there's just one thing that caught my eye, Mikael, and that is we never talk about these strategic projects. There's one thing that caught my eye, and that's Complexio.

Yeah.

I guess over time you will speak more about these things, but maybe you can just give us an introduction to why do you have these strategic projects that are outside the normal scope of Hafnia?

Well, we have them for two reasons. One is that, you know, we think it's important that you keep innovation going in a company. If all you do is the same all the time, people get complacent, so it's important to prepare ourselves for the future. One of the futures is the change of the energy complex, which I mentioned before, which is what do we do about dual fuel? What do we do about, you know, ammonia? We've been trying to, not to have any heavy investments, but we've made sure the organization follows and is ahead of that. The other one is technology. You know, I think technology for in Hafnia is a cornerstone, has been from almost day one.

Complexio is one good example of someone we've worked with now for three years, and we have kind of put our company at their disposal to make sure that they can fast-track development. Technically, what I like about, you know, the whole Complexio thing is that, you know, everyone talks about AI, but the problem with AI in general is that AI doesn't understand your business. It can do a lot of other things and make your life fun and whatever, but it does not understand what you do. What Complexio has done is to invent a technology that starts by analyzing everything we do in Hafnia, every single process workflow, and then they use AI agent to help automate these processes, which is where we see real value.

Now we are, we've reached a point where the product is there, and we are now a paying customer, and I have to say I'm super excited to see finally some of these AI-linked, high-level things actually being focusing in real life and giving us savings.

This might be a good time to ask, because, Mikael, I – you probably also noted that a lot of the logistics companies took a huge hit two weeks ago. They came down on the stock price with 15%-20% overnight because of AI fears.

Yeah.

What's sort of your concern with AI within shipping and in general?

My concern is that people do a lot of things without focusing on getting an ROE on it, and I think this is the key thing. Like, we don't have to do a lot of things just to kind of have fun with it during our daily life. I think for us it's a matter of only focusing on things that we can see gives you an output. We debate this a lot with our board, and I think we're super aligned on the thing that, make sure you come back and show us that whatever you are doing on the technology side gives a return, one way or another.

I think as long as you keep that focus, you're okay, but if you let it spread too much off-piste, you know, it could be more of a fun thing to have rather than something that improves on what you do.

Mikael, thank you very much for participating. I hope you got your answers right, and those who asked of you, thank you for participating. Thank you very much, Mikael. Have a nice day and a nice weekend. Thank you.

Thank you.