Hafnia (NYSE:HAFN) reported second-quarter net profit of $277.8 million, its strongest quarterly result since the third quarter of 2022, as tanker markets remained elevated amid disruptions to oil flows in the Persian Gulf and Red Sea.
CEO Mikael Skov said the market had not normalized six months after the start of the Persian Gulf conflict. Disruptions to Gulf flows and renewed Red Sea chokepoints continued to dislocate global oil trade, supporting tanker demand and freight rates.
Vessel Sales, Balance Sheet and Dividend
Hafnia continued to renew and optimize its fleet during the quarter, selling one LR1 vessel, two MR vessels and three Handy vessels. The sales generated a $39.3 million gain. In the third quarter, the company also completed the sale of its 50% interest in two MR vessels held through its joint venture with Andromeda, producing a $13.3 million gain for Hafnia.
At the end of the quarter, Hafnia owned 103 vessels and had nine vessels chartered in. The company’s owned fleet had an average age of 9.7 years. It also commercially managed about 60 third-party vessels. Hafnia estimated its net asset value at approximately $4.4 billion, or about $8.89 per share.
Strong operating cash flow and vessel-sale proceeds improved the company’s balance sheet. Cash rose to $271 million, while gross debt fell to $798 million and net debt declined to $527 million. Net loan-to-value dropped to 13% from 20.2% in the first quarter. Total liquidity stood at about $631 million, including $360 million of undrawn facilities.
With leverage below the lowest threshold in its dividend framework, Hafnia declared a dividend of $250 million, or $0.5003 per share, representing a 90% payout of net profit. First-half dividends totaled $0.788 per share. Skov said this marked the company’s 18th consecutive quarter of dividend payments.
Rates Remain Strong Despite Lower Seaborne Volumes
Hafnia’s fleet-wide average TCE rate reached $44,093 per day in the second quarter, while average spot rates were close to $50,000 per day. Van Echtelt said 80% of third-quarter earning days had been booked as of Aug. 17 at $30,716 per day. For the second half, 53% of earning days were covered at $28,917 per day.
“These rates are well above our operational cash flow breakeven and set the stage for another strong year of earnings,” van Echtelt said.
The company recorded 392 drydock and off-hire days in the second quarter. It expects that figure to fall to around 225 days in the third quarter and about 110 days in the fourth quarter, increasing available earning days later in the year.
Hafnia said its newbuild program consists of 10 MR tankers, with capital expenditure payments beginning in the third quarter. Starting in 2027, the company plans to calculate net loan-to-value on a fully committed basis, including remaining newbuild capital commitments and the broker-assessed value of the associated vessels.
Market Outlook Centers on Inventories and Trade Disruption
VP Commercial Søren Winther said the tanker market remained fragmented, with volumes east of Suez constrained. A memorandum between the U.S. and Iran signed in mid-June briefly enabled a partial reopening of the Hormuz Strait, but the agreement later broke down, reestablishing a Middle East chokepoint, he said.
Renewed tensions involving the Yemeni Houthis also led vessels to avoid the Bab el-Mandeb Strait, redirecting Red Sea exports northward through the Suez Canal and Sumed pipeline, according to Winther.
He said the International Energy Agency expects global oil demand to rise from 99.3 million barrels per day in the second quarter to 106 million barrels per day by the fourth quarter. Hafnia also expects OECD inventories to be rebuilt by about 260 million barrels by mid-2027, including more than 100 million barrels in the first quarter of 2027.
Winther said these inventory rebuilds, along with longer and less efficient trade routes, increased ballast passages and the migration of LR2 vessels into dirty trades, were supporting tanker fundamentals. Hafnia estimates that effective clean tanker fleet supply, measured from Handysize through LR2 vessels, has declined 3% since the start of the year.
In response to an analyst question, Winther said Hafnia was constructive on conditions through the remainder of the third quarter and into the fourth quarter, while cautioning that tanker markets remained highly dependent on geopolitical developments and available oil volumes.
He also cited potential Panama Canal restrictions, rising Chinese exports and longer ton-mile demand as factors that could further support the market. However, Hafnia identified eventual normalization of Hormuz and Red Sea traffic, as well as a potential reversal of LR2 migration into dirty trades, as risks to clean tanker freight conditions.
Leadership Transition and Strategic Priorities
Skov said the call would be his final earnings presentation as Hafnia CEO. Søren Steenberg Jensen is scheduled to take over as CEO on Sept. 1, 2026. Subject to shareholder approval at an extraordinary general meeting later in the quarter, Skov is expected to join the company’s board of directors.
Skov said Hafnia’s direction would remain focused on disciplined commercial execution, operational performance and prudent balance-sheet management. He also reiterated the company’s sustainability targets, including a 40% reduction in fleet carbon intensity by 2028 versus 2008 and net-zero Scope 1 emissions by 2050.
The company said its Seascale Energy joint venture with Cargill continued to build its bunker procurement capabilities, while its Complexio initiative had begun practical deployment in commercial and finance workflows.
About Hafnia (NYSE:HAFN)
Hafnia is a global shipping company listed on the New York Stock Exchange under the ticker HAFN. The firm specializes in the marine transportation of refined petroleum products, providing safe and reliable shipping solutions across key global trade lanes. Its core operations focus on the carriage of gasoline, diesel, jet fuel and other clean petroleum products, catering to the needs of oil majors, trading houses and independent refiners.
The company operates a modern fleet of double-hulled product tankers, managed to comply with stringent safety and environmental standards.
