CEO Statement
Six months after the conflict in the Persian Gulf began, the market has not yet normalized. The partial reopening of the Strait of Hormuz after the ceasefire memorandum was signed in June proved short-lived, as the passageway was effectively closed again in early July. Gulf exports, including routes bypassing the Strait, fell sharply by 2.1 million barrels per day (mb/d) to 15 mb/d in July.
Importantly, the bypass routes the Gulf has relied on have also come under pressure. Amid rising tensions between the Houthis and Saudi Arabia, attacks extended to the Bab el-Mandeb Strait and to infrastructure at Jazan and Yanbu, diverting Saudi oil exports northward toward the Suez Canal and the SUMED pipeline. The SUMED pipeline saw Saudi exports surge to 1.25 mb/d, the highest level since April 2020. For the product tanker market, this has led to sustained fragmentation of global trade, with volumes East of Suez remaining constrained and alternative routings adding substantial voyage distance.
Against this backdrop, Hafnia delivered the strongest quarterly result since Q3 2022. In Q2 2026, we recorded a net profit of USD 277.8 million. This included USD 39.3 million in gains on vessel sales, and our fee-based business generated USD 8.8 million. Results for the quarter were impacted by approximately 392 off-hire vessel days related to scheduled drydockings, and we anticipate approximately 225 off-hire days in Q3.
Our average fleet TCE for Q2 was USD 44,093 per day. As of 17 August 2026, 80% of our Q3 earning days are covered at an average of USD 30,716 per day, and 53% of our H2 2026 earning days are covered at an average rate of USD 28,917 per day.
At the end of the second quarter, our net asset value (NAV1) rose to approximately USD 4.4 billion, up USD 0.4 billion from Q1 2026. This is equivalent to USD 8.89 (~NOK 88.47) per share, driven by higher vessel valuations across all segments and lower debt levels amid a strengthened freight market. Our net Loan-to-Value (LTV) ratio further decreased from 20.2% in the first quarter to 13.0%, primarily due to strong cash flow generation from both operations and vessel sales.
With our net LTV below 20%, we have reached the highest payout threshold under our dividend policy. I am therefore pleased to announce a 90% payout ratio for the second quarter. Accordingly, we will distribute a total of USD 250.0 million in dividends, or USD 0.5003 per share. This reflects our continued commitment to delivering strong shareholder returns and represents an annualized dividend yield of approximately 21% based on the dividend announced for the first half of 2026.
From 2027, we will calculate net LTV on a fully committed basis, incorporating outstanding newbuild commitments and the corresponding vessel values.
We continued to execute our fleet renewal strategy during the quarter. In Q2, we completed the sale of one LR1 vessel, two MR vessels, and three Handy vessels. In Q3, we sold our 50% stake in two MR vessels within the H&A Shipping joint venture, resulting in a USD 13.3 million profit for Hafnia.
Our 13.97% stake in TORM continued to contribute to financial performance, with a market value of USD 369.0 million at quarter-end and an additional USD 9.9 million in dividend income recognized during the quarter. Our view on the logic of industry consolidation remains unchanged. The specific path and timing of any strategic steps will continue to be guided by a single priority: maximizing returns for Hafnia's shareholders.
This is my final quarterly letter as Chief Executive Officer of Hafnia. As announced on 30 June, I will step down on 1 September 2026 after sixteen years in the role. Subject to approval at an Extraordinary General Meeting, I will join Hafnia's Board of Directors. Søren Steenberg Jensen, EVP and Head of Asset Management, who has helped build this company since its inception, will succeed me as CEO.
The timing naturally invites questions. This transition was planned well in advance and is grounded in continuity. Søren has been closely involved in every element of the strategy outlined in this letter, from our fleet renewal program and distribution policy to the capital allocation that guides both. These commitments now pass to Søren. In his own words:
From Søren Steenberg Jensen, incoming CEO:
"Hafnia's strategy does not change on 1 September. My focus will be on disciplined commercial execution and operational excellence through what may remain a volatile period. The capital allocation framework set out in this letter, the payout policy, and the investment strategy carry my full commitment. I look forward to addressing shareholders in my new role at our Q3 results presentation in November 2026."
It has been a privilege to lead Hafnia and to work with an exceptional team across sea and shore. I would like to thank our employees, partners, investors and stakeholders for their trust and support throughout this journey. Above all, I would like to thank our seafarers, who have carried this company through an extraordinary period with tremendous commitment.
I am immensely proud of what we have accomplished and confident that Hafnia is well positioned for its next chapter.
- Mikael Skov, CEO Hafnia