09 | Investor relations

Board of Directors’ report

As a modern shipowner, Hafnia Limited (the “Company” or “Hafnia”, together with its subsidiaries, the “Group”) aims to maintain flexible management of its business through integrated business units, which provides an understanding of the market dynamics through experience-based knowledge and enhanced insights into relevant developments and trends in all aspects of the product tanker industry. For further details about Hafnia, please refer to Section 4 in the 2020 Annual Report available on the company’s website www.hafniabw.com.

2020 Highlights

Time Charter Equivalent (TCE) earnings for Hafnia were USD 623.2 million in 2020 and EBITDA was USD 362.8 million.

In Q4 2020, Hafnia had a net loss of USD 26.4 million (USD 0.07 per share) and the full year net profit ended at USD 148.8 million (USD 0.41 per share).

At the end of 2020, Hafnia had 821 owned vessels. The total fleet of the Group comprises of 95 vessels hereunder six LR2s, and 13 Handy vessels owned/operated. 29 LR1s (including four bareboat chartered-in, three time chartered-in and two classified as non-current assets held for sale), 47 MRs (including six time chartered-in)

Hafnia employs its vessels within the three Hafnia pools, except for the LR2 fleet. Handy TCE income/voyage day: USD 15,321, MR TCE income/voyage day: USD 17,089, LR1 TCE income/voyage day: USD 19,177, LR2 TCE income/voyage day: USD 26,514.

Hafnia’s balance sheet remained strong throughout 2020, with total assets of USD 2,543.9 million, and equity of USD 1,148.0 million amounting to an equity ratio of 45.1%, which in combination with capital discipline ensures sound financial flexibility for the future. In November 2020, Hafnia refinanced its USD 30 million facility into a USD 39 million term loan and revolving credit facility. For a detailed review of the company’s result, development and activities in 2020, please refer to the management report in the 2020 Annual Report.

1 Excluding five LR1s and one LR1 new builds owned through 50% ownership in Vista Shipping Pte Ltd

Risk Management

Hafnia’s results are dependent on the market for worldwide transportation of refined oil products. Hafnia’s activities expose the company to a variety of financial risks: market risk (including price risk and currency risk), interest rate risk, credit risk, liquidity risk and capital risk. Hafnia’s overall risk management strategy focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on Hafnia’s financial performance. In addition, Hafnia is exposed to various market, operational, and financial risks. The most significant risks are set out in the original listing Oslo Axess prospectus issued in November 2019 and the uplisting for Oslo Børs prospectus issued in April 2020. These documents and other information on risks are available on the company’s website at www.hafniabw.com.

The Group’s results are largely dependent on the worldwide market for transportation of refined oil products. Market conditions for shipping activities are typically volatile and, as a consequence, the results may vary considerably from year to year. The market in broad terms is dependent upon two factors: the supply of vessels and the demand for oil products. The supply of vessels depends on the number of newbuilds entering the market, the demolition of older tonnage and legislation that limits the use of older vessels or sets new standards for vessels used in specific trades. The demand side depends mainly on developments in global economic activity. The Group is also exposed to risk in respect of fuel oil costs. Fuel oil prices are affected by the global political and economic environment. For voyage contracts, the current fuel costs are priced into the contracts. Other risks that Management takes into account are interest rate risk, credit risk, liquidity risk and capital risk. The Covid-19 pandemic and the current downward pressure on global economic growth, and volatility in oil prices could have a significant adverse impact on the Group’s performance or operation.


Environmental, Social and Governance (ESG)


The United Nations has called climate change the defining issue of our time and urged world leaders to recognise that humanity is at a critical moment. Without committed action today, adapting to these impacts in the future will be more difficult and costly. Against this backdrop, Hafnia takes a front row seat in global efforts to combat climate change as a leading shipping company firmly committed to providing safe, sustainable and efficient hydrocarbon transportation solutions. This is how we are contributing towards the shipping industry’s efforts to reduce our environmental impact and we are a member of the Getting to Zero Coalition. For further details on sustainability, please refer to page 48, the Sustainability section of the 2020 Annual Report.


Hafnia is committed to cultivating and preserving a culture of diversity and inclusion. The collective sum of individual differences, life experiences, knowledge, unique capabilities and talent that our employees invest in their work represents a significant part of our company culture and reputation. Hafnia embraces differences in age, ethnicity, family or marital status, and all other characteristics that make our employees unique.

In 2019, Hafnia was proud to sign up to the Charter for More Women in Shipping, an initiative organised by Danish Shipping to encourage more women to join the shipping industry. A “Taskforce for More Women at Sea” has also put together ten recommendations that aim to help attract new women and to retain those who are already working in the industry. As a signee to the Charter, Hafnia has committed to establishing goals for the number of women in our employment and to drawing up concrete actions that they will undertake to reach these goals.

In the fall of 2020, Hafnia, BW Group, and Shell collaborated to run a first of-its-kind diversity innovation programme called ‘Women in Maritime Lab’. The programme aimed to scout innovative ideas from people of all genders on the challenges faced by women in the maritime industry – both at sea and ashore. A panel of judges selected the winning proposal. The winning team was “Seacode”, a team comprising seafarers from Turkey and onshore staff from Shell. Their idea, an anti-harassment app, will be further developed, tested and prototyped by Hafnia, BW LNG & Shell.


This report provides an overview of how the Company has implemented sound corporate governance throughout its organisation. The Company’s corporate governance policies are based on the Norwegian Code of Practice for Corporate Governance (the “Code”) dated 17 October 2018 issued by the Norwegian Corporate Governance Board. The Code is available at www.nues.no. For an overview of the Company’s compliance with the Code, please refer to page 70 of the 2020 Annual Report.


Going Concern

In light of Hafnia’s liquidity position, balance sheet strength, assets, employment, and continuing cash flow from operations, the Board confirms that the going concern assumption, upon which Hafnia’s accounts are prepared, continues to apply.

Responsibility statement

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