Board of Directors’ Report

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, providing an understanding of market dynamics through experience-based knowledge and insights into relevant developments and trends in all aspects of the product and chemical tanker industry.

For further details about Hafnia, please refer to Section 1 in the 2022 Annual Report available on the Company’s website

Financial performance

Time Charter Equivalent (TCE) earnings for Hafnia in 2022 increased to USD 1,346.7 million from USD 402.9 million in 2021 due to stronger freight rates and bigger fleet size following the strategic acquisitions of 44 modern chemical and product tanker vessels.

Hafnia reported strong TCE earnings of USD 23,351/day for its Handy fleet, USD 30,113/day for its MR fleet, USD 35,826/day for its LR1 fleet, USD 33,563/day for its LR2 fleet, USD 24,910/day for its Chemical – Handy fleet, USD 31,481/day for its Chemical – MR fleet and USD 18,446/day for its Chemical – Stainless fleet.

Hafnia’s net TCE in 2022 was USD 30,274/day based on vessel utilisation of 98%, as compared to 2021, where net TCE was USD 12,141/day based on vessel utilisation of 98%.

Following a challenging year in 2021, tanker markets in 2022 remained volatile, and faced ever-changing market dynamics throughout the year. Increased demand for clean petroleum products paved the way for a rebound in product trade and was coupled with the effect of longer ton-miles due to sanctions on Russian trade.

In Q1 2022, Hafnia completed the acquisition of Chemical Tankers Inc (CTI), along with its fleet of 32 modern chemical tankers, and the acquisition of 12 modern LR1 vessels. Eight stainless steel tanker vessels acquired from CTI were subsequently divested by Q3 2022.

As part of Hafnia´s fleet renewal strategy, four LR1 and six Handy vessels have also been divested at attractive prices during the year.

Hafnia reported a net profit after tax of USD 751.6 million in 2022, as compared to a net loss after tax of USD 55.5 million in 2021, with an increase in ROIC and ROE to 28.3% and 48.2% respectively in 2022, from (0.4%) and (4.9%) respectively in 2021.

The increase in net profit after tax and returns in 2022 was mainly due to higher TCE earnings, the effect of an enlarged fleet size, and an increase in income from the pool and bunker platforms. The divestment of vessels also contributed to a gain of USD 25.4 million.

Hafnia’s balance sheet strengthened further throughout 2022, with total assets of USD 3,918.9 million, total liabilities of USD 1,909.9 million and total equity of USD 2,009.0 million amounting to an equity ratio of 51.9%, as compared to total assets of USD 2,511.0 million, total liabilities of USD 1,398.9 million and total equity of USD 1,112.0 million amounting to an equity ratio of 44.3% in 2021.

Hafnia’s operating cash flows for the year mainly comprise of cash provided from Hafnia’s operations of USD 729.4 million.

Net cash used in investing activities was USD 190.0 million, and net cash used in financing activities was USD 465.1 million. The strong operating cash flow was primarily utilised in acquisition of vessels, repayment of borrowings, and dividends paid to shareholders.

At the end of 2022, Hafnia had 115 owned vessels, 13 chartered-in vessels and four Newbuilds1. The total fleet of the Group comprised of 132 vessels, hereunder six LR2s, six Handy vessels, 40 LR1s2 (including four bareboat chartered-in and four time chartered-in), 52 MRs3 (including nine time chartered-in), six Chemical – MRs and 18 Chemical – Handy vessels.

1Including four LR2 Newbuilds owned through 50% ownership in the Vista Joint Venture

2Including six LR1s owned through 50% ownership in the Vista Joint Venture

3Including two MRs owned through 50% ownership in the Andromeda Joint Venture

Parent Company Accounts

Hafnia Limited is a holding company. The Company reported a net profit of USD 384.3 million for 2022, compared to a net profit of USD 41.8 million in 2021. The increase in profit in 2022 was due to higher dividend income from its subsidiary. Expenses of the company are mainly comprised of administrative expenses, and costs related to the operations of the
investment holding company as a listed entity.

Total assets were USD 1,672.0 million as of 31 December 2022, compared to USD 1,288.6 million in 2021. The increase was mainly due to the acquisition of CTI and an increase in amounts due from a subsidiary. Total liabilities were USD 1.8 million as of 31 December 2022 compared to USD 79.9 million in 2021. The increase was mainly due to a decrease in
the Company’s related party payables.

Total shareholders’ equity in Hafnia Limited was USD 1,670.2 million as of 31 December 2022 as compared to USD 1,208.7 million as of 31 December 2021. The increase was mainly due to an increase in dividend income from a subsidiary and the issuance of equity as consideration for the acquisition of CTI.


Hafnia´s motto is zero harm to people, the environment, cargo, and property.

Hafnia is continuously improving and evolving procedures to mitigate hazards faced by the maritime industry. Safety culture focuses on human factors and is based on reducing accidents at sea.

For an overview of employee health and safety metrics, please refer to chapter 2.4 of the Annual report.

Risk management

Hafnia is exposed to various commercial, operational, financial, and climate-related risks. 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.

The most significant risks are set out in the latest prospectus issued by Hafnia on 1 March 2022 in connection with the CTI transaction. These documents and other information on risks are available on the company’s website at

Risk is inherent in the business activities of Hafnia and managing them is critical for ensuring its longterm success.

Hafnia’s overall risk management program focuses on the unpredictability of economic and financial landscape and seeks to minimise potential adverse effects on Hafnia’s operations.

Top risks identified as having the potential to substantively influence Hafnia’s business and operations at an enterprise level are then deliberated and reviewed by the Executive Management Team and the Board of Directors.

Through management of market, regulatory, reputational, technology and financial risk, Hafnia will be able to generate and deliver sustainable value for its customers, employees, shareholders and the community.

For a summary of Hafnia’s main risks, please refer to chapter 3.3 of the 2022 Annual Report.

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 to fuel oil costs. Fuel oil prices are affected by the global political and economic environment.

Hafnia has also purchased and maintains a Directors and Officers Liability Insurance, issued by a reputable, specialised insurer with an appropriate rating.

Our business responsibility

In line with the increasing expectations of stakeholders and society – and in doing the right thing for the good of the maritime industry– Hafnia is committed to its role as a responsible industry leader.

In 2022, Hafnia has consolidated its material issues and strengthened its ESG governance, strategy, and targets.

Hafnia’s ESG reporting includes progress and performance in the context of activities relating to environmental, social and governance for the financial year ended 31 December 2022.

For an overview of Hafnia’s ESG strategy, please referto chapter 2.1 of the Annual Report.


In 2022, Hafnia developed its climate strategy, committing to achieve the 2030 IMO target ahead of schedule and to drive the business towards Net Zero emissions by 2050.

The path towards decarbonisation requires strong collaboration with internal and external stakeholders. Hafnia is actively engaging with parties to share an approach to sustainability and work on the development of solutions for decarbonising the maritime industry and preserve biodiversity.

For an overview of environmental actions, please refer to chapter 2.2 and 2.3 of the Annual Report.


With social aspects as a vital dimension of a sustainable business, Hafnia puts its people onboard and at sea at the core of its business practices, creating conditions for them to thrive in a safe working environment.

Hafnia encourages an ongoing dialogue with its employees via various platforms. The Company maintains a strong speak up culture, with measures in place for misconduct reporting.

For an overview of our social actions, please refer to chapter 2.4 and 2.5 of the Annual Report.


Hafnia has a strong focus on the implementation of best in class governance and effective risk management processes. Business is conducted in an ethical and transparent way in accordance with company-values and its code of conduct.

Hafnia maintains its stance against corruption and bribery in the maritime industry, with a Zero Tolerance policy.

Hafnia has implemented sound corporate governance throughout its organisation. Corporate Governance policies are based on the Norwegian Code of Practice for Corporate Governance (the “Code”) dated 14 October 2021 issued by the Norwegian Corporate Governance Board. The Code is available at

For an overview of the Company’s compliance with the Code, please refer to chapter 3.3 of the 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


We confirm that, to the best of our knowledge, the financial statements Responsibility Statement for the year 1 January to 31 December 2022 have been prepared in accordance with current applicable accounting standards, and give a true, and fair view of the assets, liabilities, financial position and profit or loss, of the Group and the Company taken as a whole.
We also confirm that the Board of Directors’ Report includes a true and fair view of the development and performance of the business and the position of the Group and the Company, together with a description of the principal risks and uncertainties facing the Group and the Company.


Financial Statements

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