Hafnia (NYSE:HAFN) reported a sharply higher first-quarter 2026 profit as management said geopolitical disruption and tighter tanker availability drove freight rates higher across the product tanker market.
Chief Executive Officer Mikael Skov said the quarter was “transformative” for the tanker industry and “largely defined by geopolitical disruption without modern precedent,” citing the closure of the Strait of Hormuz as a major factor reshaping global oil trade flows. Hafnia reported net profit of $179.7 million, nearly three times its first-quarter 2025 result, supported by higher freight rates, tighter tanker supply and disrupted trading routes.
The company said 73% of second-quarter earning days had been covered at an average rate of $46,600 per day, which Skov said supports Hafnia’s expectation for a stronger second quarter.
Profit, EBITDA and Balance Sheet Improve
Chief Financial Officer Perry van Echtelt said the first quarter was Hafnia’s strongest since the end of 2024. Time charter equivalent, or TCE, income rose to $282.5 million from $218.8 million in the first quarter of 2025. Adjusted EBITDA increased to $198.6 million from $125.1 million a year earlier.
Van Echtelt said fee-based business contributed $7.1 million, while Hafnia earned $9.9 million in dividend income from its investment in TORM. The quarter also included $32.5 million in gains from vessels sold during the period.
Hafnia’s return on equity reached 29.5% on an annualized basis, while return on invested capital was 22.7%, both described by van Echtelt as the highest levels recorded in the trailing five quarters.
The company’s net debt fell to $797 million from $932 million, driven by operating cash flow and proceeds from vessel sales. Net loan-to-value improved to 20.2% from 24.9% at the end of the prior quarter. Hafnia reported total liquidity of approximately $660 million, including $146 million in cash and $515 million in undrawn credit facilities.
Dividend Declared Under 80% Payout Policy
Skov said Hafnia has now paid dividends for 17 consecutive quarters. In line with its dividend policy, the company declared an 80% payout ratio for the quarter, equal to a total cash dividend of $143.8 million, or $0.2877 per share.
Skov said the dividend represents an annualized yield of 14%. Over the last four quarters, Hafnia’s cumulative dividends totaled $365.3 million, or $0.7319 per share. He also said the company’s total shareholder return over the past 12 months exceeded 100%, reflecting earnings, dividends and share price appreciation.
Market Outlook Shaped by Hormuz Closure and Refinery Disruption
Vice President Commercial Søren Winther said the market environment was unlike anything seen in modern shipping history. He said global observed inventories drew down by roughly 200 million barrels between February and April 2026, with OECD on-hand stocks falling by 146 million barrels in April alone. He added that the International Energy Agency’s cumulative deficit is projected to reach about 900 million barrels by September.
Winther said the closure of the Strait of Hormuz, refinery damage and shifting trade flows had created a market supported by elevated ton-miles, structural fleet tightness and the need for a multi-quarter inventory rebuild. He said U.S. clean product exports rose approximately 40% from February to May, partly filling the gap left by Middle East disruption.
He also said approximately 2 million barrels per day of Middle Eastern refining capacity was offline due to war-related infrastructure damage, including facilities such as SATORP in Jubail, Bapco in Sitra and ADNOC Ruwais. According to Winther, full capacity is not expected to return before the first quarter of 2027, based on indications from Eastern refiners.
Winther said global clean petroleum product departures were down approximately 15%, with the decline concentrated east of Suez, while global dirty petroleum product departures were down about 17%, largely due to lower Arabian Gulf crude exports. However, he said floating cargo volumes were down only about 6%, suggesting vessels were spending more time on the water and absorbing supply.
Winther also pointed to a continued migration of LR2 vessels into Aframax dirty trading. Year to date, he said about 72 LR2 vessels had shifted into dirty trading, reducing clean LR2 availability by approximately 28% and tightening clean tanker supply.
Fleet Renewal Continues With MR Newbuilds
Hafnia owned and chartered in 118 vessels at the end of the quarter, with an average fleet age of 9.6 years. Skov said the company’s net asset value increased to approximately $4 billion, equal to $8.09 per share, or about NOK 78.81, up from $3.5 billion at the end of the fourth quarter.
The company continued to divest older vessels during the quarter as part of its fleet renewal strategy. Skov said Hafnia also signed a contract for eight new MR newbuilds with Hyundai Heavy Industries, with deliveries expected between the third quarter of 2028 and the second quarter of 2029. Hafnia later exercised two additional options with the same yard for delivery in 2029, bringing the program to 10 MR vessels.
During the question-and-answer session, Skov said the newbuild decision followed the sale of older vessels at strong prices. He said Hafnia viewed the orders as “normal modernization of the fleet,” while also noting that shipyard order books are filling up far into the future.
Skov said secondhand vessels are currently “very highly priced” because of the strong spot market, while the newbuilds represent a newer generation of vessels with better fuel efficiency and lower emissions. He added that deliveries in 2029 could come at a time when the aging fleet is under pressure and the current orderbook may not be sufficient to replace vessels that need to be scrapped.
Pool Changes and Sustainability Targets
Skov said Hafnia intends to wind down its Handy and LR2 pool operations in 2026. As Handy vessels are sold, the company expects to exit the Handy segment entirely. He said the Handy market has been shrinking in both demand and vessel supply, and that attractive asset prices supported the decision to sell.
For LR2s, Skov said Hafnia does not have many vessels in that segment and has chartered out some of them, reducing the rationale for maintaining a pool without meaningful company exposure in the spot market.
On sustainability, Skov said Hafnia’s targets remain unchanged: a 40% reduction in fleet carbon intensity by 2028, net-zero Scope 1 emissions by 2050 and zero harm across operations. The company also continues to target 40% women in its offices by 2030.
Skov said Hafnia has begun deploying an enterprise AI platform through Complexio to integrate conversational AI, workflow analytics and automation. He said initial applications have improved response times across commercial and finance workflows.
Looking ahead, Skov said Hafnia remains encouraged by product tanker market fundamentals, though he emphasized that the outlook remains highly uncertain and depends on the duration of disruptions and the timing of oil production and refinery recovery.
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.
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