Hafnia expands fleet through new joint ventures

Singapore-based tanker owner and operator Hafnia has expanded its fleet with two MR newbuilds and declared an option for two additional LR2 dual-fuel liquefied natural gas (LNG) vessels through new joint ventures.

Illustration; Credit: Hafnia

The two MR tankers were acquired through the company’s new joint venture established with Monaco-based tanker owner International Andromeda Shipping.

As disclosed, the vessels will be built at Hyundai Mipo Dockyard and are slated for delivery in July 2021 and January 2022. Both vessels are chartered out on five-year contracts.

Furthermore, Hafnia exercised an option for two additional
LR2 dual-fuel LNG units in May 2021 through its joint venture with CSSC Shipping, Vista.

The ships were acquired for $59.0 million and upon delivery, they will be chartered out for 5 years to an unnamed oil major at attractive rates.

“Vista’s high-pressure engines release 97% less methane than a standard low-pressure LNG engine. The fuel systems on-board are prepared for future renewable fuels with some engine modifications,” Hafnia stated.

The news about the expansion of the company’s fleet were revealed in Hafnia’s financial report for the second quarter of 2021.

In Q2 2021, Hafnia recorded a net loss of $11.2 million and a net profit of $97.7 million. For the first half of the year, the firm posted a net loss of $26.9 million.

The earnings before interest, taxes, depreciation, and amortization (EBITDA) for the first quarter of the current year was $37.9 million compared to Q1 2020 when it reached $145.9 million.

What is more, EBITDA for the first half of 2021 was $75.0 million against $275.5 million for the same period last year.

To optimise the pools’ working capital requirements and significantly improve cash flow for existing and new pool partners, Hafnia signed a $100.0 million facility in July.

“The first half of 2021 was weak for the product tanker segment. However, we see decreasing global oil inventories as a result of increasing demand. Furthermore, we expect the market to improve in Q4 2021 due to accelerated widespread vaccination programs in major economies worldwide,” Mikael Skov, CEO of Hafnia commented.

“Hafnia continues to believe that further consolidation within the product tanker sector is the best path forward to unleash value and synergies from additional operational scale,” he concluded.

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At the end of the quarter, Hafnia had 87 owned vessels and 13 chartered-in vessels.