Welcome to Hafnia's Fourth Quarter 2021 Financial Results Presentation. We will begin shortly. You will be brought through the presentation by Hafnia CEO Mikael Skov, CFO Perry van Echtelt, EVP Commercial Jens Christophersen, and EVP Head of Investor Relations Thomas Andersen. They will be pleased to address any questions after the presentation. Should you have any questions, you can submit them via the chat function or use the raise hand function to be unmuted to ask your question verbally. Questions will be answered at the end of the presentation. You will receive further instructions as required. Certain statements in this conference call may constitute forward-looking statements based upon management's current expectations and include known and unknown risks, uncertainties, and other factors, many of which Hafnia is unable to predict or control, that may cause Hafnia's actual results, performance, or plans to differ materially from any future results, performance, or plans expressed or implied by such forward-looking statements. In addition, nothing in this conference call constitutes an offer to purchase or sell or a solicitation of an offer to purchase or sell any securities. With that, I am now pleased to turn the call over to Hafnia CEO Mikael Skov. Thank you for this. My name is Mikael Skov, and I'm the CEO of Hafnia. Let me welcome you to Hafnia's fourth quarter 2021 conference call. With me here today, I have our CFO, Perry van Echtelt, EVP Commercial Jens Christophersen, and EVP Head of Investor Relations Thomas Andersen. The four of us will present the fourth quarter of 2021 financials for Hafnia. Today's presentation agenda consists of three key areas. We will begin with an overview of Hafnia and key highlights of the fourth quarter, followed by commercial updates on the product tanker market, and finally ending off with our ESG overview. Before we move on, this is an extremely worrying and distressing time for everyone, and especially for our Ukrainian and Russian seafarers. We're doing all that we can to support our seafarers during these difficult times. We will continue to follow all international rules and regulations, and we stress that the priority for Hafnia will always be the safety of our crew. Let's move to slide number 2, and I just want you all to be aware and take note of the mandatory disclaimer. Moving on to slide number 3, I would just begin by giving an overview of Hafnia and the key updates on the fourth quarter, and by that, moving into slide number 4. Hafnia is a fully integrated shipping platform, operating within the product and chemical tanker market. We are listed on Oslo Stock Exchange under the ticker code HAFNY. At the end of 2021, we owned and had chartered in a diversified portfolio of 102 vessels across 4 product tanker segments. Our fleet has since grown to 151 vessels after the conclusion of recent transactions, which we will show more in detail later. Apart from being a ship owner, we have a global commercial platform with chartering teams in Asia, Europe, the Middle East, and USA. We also have our own in-house technical management and bunker procurement team. Our technical management team ensures that the highest safety and environmental standards are maintained on board, while our bunker team is now buying bunkers for more than 550 vessels for our pool platform and third-party owners. Key revenue from our bunker and pool business has been strong and consistent. In 2021, our commercially managed pool business generated an income of $21.7 million, and based on this success, we will continue to develop these adjacent businesses. These various operational segments make Hafnia a fully integrated platform, highlighting several key value propositions. Firstly, Hafnia is now the largest operator of product and chemical tankers in the world. Our fleet's low average age of 8.3 years and unparalleled scale makes Hafnia business robust and sustainable, enabling better utilization and improved earnings capability through the shipping cycle. We continue to focus on having the lowest operating and funding cost. Our operating cash flow breakeven was $13,086 per day for the year. Strong relationships with our stakeholders such as banks and industry partners, giving us access to industry-leading debt financing and our solid balance sheet are key contributors to our competitiveness. At Hafnia, we have a clear ESG profile. With growing impact from environmental regulations, Hafnia is well-equipped and takes all responsibilities seriously to minimize our carbon footprint. Moving to slide number 5. Let me move on by giving an overview and updates of the recent activities Hafnia has been involved in. Firstly, Hafnia's acquisition of CTI with a fleet of 32 vessels through a share issuance has been concluded on the 27th of January, 2022. The CTI transaction was concluded on an NAV to NAV basis. As a result, the CTI shareholders now represent 21.5% of Hafnia's shareholder base. Recently, Hafnia also acquired 12 modern LR1s. The fleet is young, all built in 2016, except for one that is built in 2015, and they will all be delivered by May 2022. We have also further improved our liquidity and cash position by $135 million through a few debt financing transactions. The 12 LR1 vessels that we have acquired will be funded with a sale and leaseback facility with ICBC. These transactions highly underscore the strong ongoing engagement we have with our lenders, which gives us access to industry-leading debt financing and breadth of capital sources, thereby improving our success and access to liquidity. With CTI and the LR1 fleet acquisition, Hafnia now has a modern product and chemical fleet and will focus on optimizing synergies and earnings potential. We have a good public track record of swift and successful integration after significant transactions. Likewise for these, the integration of CTI and 12 LR1 vessels is well on track. As a result of these strategic transactions occurring at a period when Hafnia was trading at a large discount to NAV, Hafnia has sought out alternative channels to a capital raise and hence increased our leverage. In this regard, we will also be focusing on reducing our financial leverage to pre-deals levels through a combination of retained earnings and sale of non-core vessels when the markets are right. Moving on to slide number 6. After the conclusion of recent transactions, apart from being the largest product and chemical tanker operator, we have also expanded the range of cargoes we can transport. With the added capabilities of the chemical fleet, which comprises vessels with high-spec coated tanks, they can transport chemicals in addition to clean petroleum products, which gives us more trading flexibility, resulting in better utilization of the vessels. Looking at the potential trading routes of the chemical tankers, you can see how we are now able to unlock operational synergies and limit ballast time by switching between the type of cargoes transported. We will be uniquely positioned to offer customers across the product and chemical tanker industry the required reliability to operate successfully in both markets. We have recently opened a new office in Dubai, which will oversee the trading of our chemical fleet. The Middle East is a very important region for chemical production and export, and we believe this will open new doors and trading opportunities for our existing product fleet. Perry will now take us through the financials. Thank you, Mikael. If we move to the next page. As global demand recovered at the end of last year, rates improved, which is why Q4 improved significantly compared to the previous three quarters. The fourth quarter saw a TCE income of $112.6 million and a net loss of $7.9 million. For the full year, we saw TCE income of $402.9 million, and this combined with the write-off of $3.1 million on assets held for sale, resulted in a loss of $55.5 million for the full year. Despite this, we remain positive of the product tanker market going into 2022 as we expect increased cargo volumes and longer voyages to meet increasing oil demand and replenish low inventories. We've also seen accelerated levels of scrapping of older tonnage. Income from the management of third-party vessels and buying bunker on behalf of third party clients was $21.7 million for the full year. We continue to see strong access to the banking environment, and with the increasing interest rates for US dollar financing, we've also continued to gradually increase our interest rate hedging position to lock in the rates to match the tenor of our debt profile. We are constantly evaluating our performance by benchmarking ourselves, and I'm pleased with our performance relative to peers under these challenging circumstances. This results from the quality in our daily commercial decision-making and the understanding of the market conditions. The graphs on this page further reinforce this. For 2021, we benchmarked some key metrics against our peers. You can see that Hafnia stands out from the rest in all these segments. For 2021, we saw a return on equity of -4.9%, but the balance sheet remains strong with a cash position of $100 million. As Michael already mentioned, we have also further strengthened our liquidity position through the refinancing of our $266 million MR facility and amendment of the $216 million LR2 facility. This is a combination of both refinancing and amendment of term facilities and creating more flexibility in our balance sheet through revolving credit facility and the like. This provides a very cost-efficient and flexible source of liquidity. On the fleet, the average estimated broker value of our own fleet was $2.1 billion as of December 31, 2021. If we move on to the next page on the operating data. For 2021, we saw a TCE revenue of $402.9 million on the basis of 33,188 earning days. This represents an average TCE of $12,141 per day across the segments. This is $23,382 per day on the LR2s, $11,254 per day on the LR1 vessels, $11,845 per day on the MR vessels, and finally $10,353 per day on the Handy vessels. As of March 14, 2022, 85% of the total earning days in Q1 2022 were covered at $15,889 per day. The situation in Ukraine has led to significantly higher oil prices amid concerns about the Russian oil supply. As a result, refined oil products are already starting to be transported over longer distances to meet an expected shortfall of supply of oil to the Atlantic basin, which has been positive for freight rates. Looking at OpEx, which includes our vessel running costs and technical management fees, it was $207.8 million for the year on the basis of 30,255 calendar days, resulting in an average of $6,868 per day. G&A per day for the year was $948. Moving on to the next page. Before Jens guides us through the commercial developments, I'll bring you through our combined fleet breakdown and our pool economics. As of the start of March, we operate a combined fleet of 225 vessels under commercial management, of which 135 are owned or chartered in, either through long-term time charters or bareboat charters across the five different segments. This is excluding the acquired LR1 fleet, which we expect to be delivered in the coming weeks, stretching into May, the four LR2 new builds that we own through our Vista joint venture, which we expect to be delivered in 2023. Hafnia currently operates vessels in four pools, which range from the largest product tankers to specialized tankers of just under 20,000 deadweight tons. Our highly specialized chartering and commercial teams are responsible for developing, marketing, negotiating, and executing all contracts for vessels that the pools operate in. Hafnia receives pool management commission in the form of a fixed fee and a percentage of all net pool income, as outlined on this page. Working capital upon entering the pool also ranges across the different sectors, from $750,000 for the LR pool to $250,000 for the specialized pool. Revenues from commercial management have been increasing steadily over the years, and with this success, we will continue to invest in our commercial platform to increase the service level and build scale in the pools through adding external vessels with the right pool partners. Jens, why don't you take the next couple of pages? Thank you for this, Perry. These next few pages show the global oil outlook and our expectations for the product tanker market. If we can move one page. Global oil demand has recovered in the fourth quarter in 2021, rising by 1.5 million barrels a day, mainly due to the milder than expected negative impact of the Omicron variant and the energy crisis leading to the soaring natural gas prices. This has led to a widening gas price premium over oil products, causing fuel switching from natural gas to clean, low sulfur oil products for power generation in Europe and China. As long as the gas markets remain tight and at a price premium to oil products, this will add to oil demand, and we expect this to continue through the first quarter of 2022 in the heating season. On the supply side, global oil production has also increased in the fourth quarter and is expected to increase going into 2022. The OPEC+ alliance have continued to pump below target levels and see market share dropping, lastly due to technical issues and capacity constraints. As a result, producers outside the alliance has been responsible for the majority of recent growth in supply as U.S. shale continues to respond to higher prices. Despite that, the global oil supply is still forecasted to grow from 98.1 million barrels a day in Q4 to 101.5 million barrels a day in 2022. Global oil demand has been recovering well in recent months and is expected to reach pre-pandemic levels in the second quarter of 2022. Compared to its predecessors, which saw many governments lay stricter rules to avoid a collapse of their healthcare systems, the COVID Omicron variant had a muted impact on global activities and oil demand. Towards the tail end of 2021, we've seen the gradual reopening of many countries' borders and vaccinated travel lanes set up amongst many countries. Mobility indicators worldwide have also remained robust, where the number of international flights and driving indices are on an upward trajectory. This lends support to the demand of both motor gasoline and jet fuel, which are still below pre-pandemic levels in 2021 to increase in 2022. Overall, we expect oil demand to overtake pre-pandemic levels this year, rising by 3.3 million barrels a day to 100.6 million barrels a day in 2022. Oil production has not kept pace with oil demand, and consequently, oil inventory levels have been declining rapidly to levels below the last five-year range. OECD countries are 355 million barrels lower than a year ago, with product stock accounting for most of the decline. Total inventory levels now stand at 2,680 million barrels, one of the lowest levels seen during the past decade, and it only covers 59.6 days in terms of forward demand. Product stocks dropped by 30 million barrels in December to 1,377 million barrels, with middle distillates declining by 13.9 million barrels when they typically build by a seasonal average of 11.2 million barrels. With this improvement in oil demand and rapid drawdown of inventories, we do not expect to see a reversal in stock levels in the coming months. Cargo volumes for CPPs and chemicals have also steadily recovered from the effect of the pandemic, reaching 445.5 million barrels in January 2022, from 428.6 million barrels in January 2020. Likewise, ton-miles have also surpassed pre-pandemic levels, reaching 280.9 billion ton-miles in January 2022. In short, with oil demand expected to grow, this bodes well for the tanker trade volume, which is expected to grow further in 2022. Moving on. The refining sector is recovering well with a major ramp up in global refining activity at the end of 2021. However, this was not enough to curb the decline in product inventories. Total refinery throughputs recovered by 3 million barrels a day in 2021 to reach 77.8 million barrels a day, and is expected to surpass pre-pandemic levels at the end of 2022. There's also the continued trend of refinery closures with 2.8 million barrels a day of closures in 2021, mainly in Europe and Asia. The closures are expected to drive firm growth in imports into these regions, with longer haul exports from the Middle East expected to fill much of the supply gap following the start up of significant volumes of new refining capacity in the Middle East region. We expect continued growth in naphtha trade to East Asia, largely on longer haul routes from the Middle East, owing to the start up of new petrochemical capacity with flexible feedstock capability in China and South Korea. As a result, this will positively impact the product tanker demand with increased seaborne volumes of refined products and ton-miles. On the supply side, growth was moderate, with capacity increasing by 2% in 2021. Looking at the age profile of oil tankers, while the majority are still in the younger age range, we can expect the profiles of the aging fleet to increase due to the low order book for tankers in recent years. This further reinforces the importance of having a young fleet, as older vessels tend to have more waiting time and shorter voyages. Additionally, the scrapping of older tonnage is increasing. We've already seen this trend in 2021, where a total of 3.7 million deadweight was scrapped, up from 1 million in the whole of 2020. Scrapping levels for the following years are also expected to remain high, as steel prices are likely to remain high and owners face increasing environmental regulations from the introduction of EEXI and CII regulations in 2023, suggesting a more positive period for the tanker market as it potentially encourages accelerated scrapping. Now I'd like to touch on the Russia-Ukraine conflict that has been creating a volatile shipping market. Russia in 2021 is estimated to account for about 9% of global seaborne growth and 11% of global seaborne product exports. Total Russian seaborne product exports amounted to 108 million tons, with Europe and U.S. being the major destinations. There could be a certain degree of ton-mile impact for product tankers if European buyers replace Russian diesel and fuel oil with longer haul imports from the Middle East and the Far East. The situation is fluid and holds considerable uncertainty. Since the week leading up to the 24th of February, we've already seen around a 40% drop in total tonnage within the Black Sea, and we can expect to see a further decrease. With sanctions and buyers avoiding Russian cargos, we can expect European refineries to be affected due to the resulting lower availability and higher cost of crude oil. Here at Hafnia, we continue to trade our ships in compliance with all international sanctions and laws, and crew safety remains a priority. Michael, I'll hand it over to you for the next couple of slides. Thank you for this. Moving on to slide number 18, as you can see. The shipping industry is facing increasing pressure to decarbonize towards a net zero emission future. In Hafnia, we're always on the lookout for potential partnership opportunities to accelerate our environmental initiatives. We are currently partnering with Diginex Solutions, a world-leading sustainability-focused impact tech company, to bolster the digital collection, management, and reporting of our ESG data. We are also in full compliance with the IMO 2020 regulations on sulfur emissions. For 2021, across Hafnia's own fleet, our carbon intensity, as measured by the Annual Efficiency Ratio, was 5.4 grams per ton-mile, which is 6.4% better than the present IMO baseline. The target ratio has been lowered by around an additional 3% since the CTI acquisition. Still, Hafnia is committed to transitioning into a zero emission world as a leading transportation company. We have set a goal to reach IMO's 2030 target of a 40% reduction in the carbon intensity of the fleet two years in advance, and are well on track to achieve that. Move on to slide number 19. Looking ahead, the future remains volatile and uncertain due to rising geopolitical tensions, but we believe Hafnia is well equipped to face it. We expect to see a strong rebound in the product tanker market going forward, with an increase in products and ton-mile trade. Hafnia, being the largest operator of product and chemical tankers, has expanded the range of cargoes that we can transport, reaching out to a wider customer base. We have also increased our geographical presence, which will open doors to new trading opportunities and improved earnings capabilities. Lastly, shipping has always been under the spotlight to decarbonize its operations. With the increasing impact from environmental regulations, Hafnia is well equipped to face it and will continue to strive and expand our sustainability capabilities by seeking out potential innovations or collaborations. With that, I'd like to open up the call for questions. We will begin our Q&A session now. Should you wish to ask questions, you can submit them via the chat function or use the raise hand function to be unmuted to ask your question verbally. We'll start with David Bhatti. Hi, this is David Bhatti from SEB. You've increased your leverage on the back of the recent vessel acquisition. What's your new cash break even going to be when the fleet is fully integrated? Hi, David. David, it's Perry here. Including the new acquisitions for both the LR1s and the chemical tankers are given the financing that we have on these ships, the capital break even will go up. Will go towards around probably $40,000, but if you want, we can give you the exact numbers later on. All right. That's up from the current 13,000 level and up to 14,000, give or take. Give or take. Okay. Thank you. Next question from, Frode Morkedal. Mørkedal. Thank you. Hi, guys. I'm not sure if you have published a pro forma balance sheet including CTI. If not, could you give the debt levels and cash level as of, I don't know, maybe end of 2021 or Yeah. Hi, Frode here. It's Perry again. The acquisition of CTI will be included in the Q1 financials as we close the deal in January, and part of the LR1 fleet will be there as well. We gave pro forma numbers when we announced the transaction with the net asset values and the outstanding debt. For now, I would work with those numbers. You can also find more information on that in the prospectus. Yeah. We released following the transaction, some two weeks ago. Okay. Yeah, I think it was $710 million net debt or just- For CTI. Oh. Yeah. Yes, exactly. Anyway, I'll look for updated number when you have it. I'm curious about the pool operations you have. Can you shed some light on the net earnings or EBITDA from that business? Well, yeah. I don't think we have broken down into the EBITDA, but we have, was it $21.7 million, in revenue from third party pool participants. I think that's the closest we've ever said publicly on that. Okay. Put it differently, how much of your G&A is tied to pool operations? That's a good question. It's probably 40% of that will probably go to EBITDA. That's at least historically. We haven't done the analysis for 2021, but for 2020, that was in that neighborhood. Okay. I know it's just, you're just taking over CTI, but I'm curious to know if you have any, let's say, has this met your expectations so far, and what's your current take on the chemical tankers market development? Yeah. You know. I think, Jens, maybe you want to tell a little bit about the you know our expectations on the market. I can say this, yes, Michael, that yes so far it definitely has lived up to our expectations. I think it's been a smooth process, as we also state, so far. You know, I think we're Actually, they may be even positively surprised about, let's say, the period from doing the transaction until where we are today. That has been good. If anything, it's only been more positive than when we did the transaction. Maybe, Jens, do you wanna add a bit of color to the commercial side of it? Yes. I can add that we're in the process of building our organization, and we feel very comfortable about that. We've opened up an office in Dubai where we will have a presence towards the important customers in that part of the world. In terms of the market prospects for chemicals, we do see over you know a really long-term view that there is significant growth in this segment. In the short-term view, the chemical markets will also be impacted by a stronger clean petroleum market. Sorry. Any more questions? Yeah. One more from me, please. David at SEB again, for Jens. What trade routes and products are kind of driving the current increase we are seeing in the product tanker rates? The biggest difference we've seen is that we have started to see higher volumes and longer ton-miles of diesel oil and gasoline moving from the Eastern Hemisphere towards the Western Hemisphere. That has been one major route that's been, you know, significantly impacted already. This started out in the LR segments and has, you know, by now spilled over to the MR segments in the East. We're seeing significant strength in the East, and in the West, we've also seen good strength with very high activity out of the U.S. Gulf. The West is also in a good place from an earnings perspective. Okay, great. Yeah. Thank you. Thank you. Next question is, Howard Lih. Hi. This is Howard from Danske Bank. You mentioned that you would sell non-core vessels at the right time to reduce leverage. Would that be older vessels in general or, for example, would you look at selling the 25 K stainless steel vessels, for example? Yeah. Actually, that's exactly what we are referring to. You know, I mean, the oldest part of our fleet, we've always had targeted for sale. You know, when prices improve a bit on the back of a stronger market, then that would be our targets. Also, you know, the 25 stainless steel will also probably, going forward, again, provided pricing is right, is something we would consider. That's exactly how we look at it. Okay, thank you. Next question is Erik Hamilton. Hi. Can you maybe comment a little bit on your MR bookings because they are quite spectacular, if I can use that word, for Q1 so far? Anything in particular that you've done there? And second, can you also maybe explain to us now what the spread between your, let's say, 2007 built Alhena vessels and your newly or the ones you are now taking delivery of from Scorpio, how big is the sort of daily spread in earnings right now on those vessels? All right. Yeah. Good questions. First of all, on the MRs, the earnings that we are reporting for Q1 are also being reported towards the end of a quarter where we've seen significant strength in the month of March. That probably explains some of the reason for the number behind it. Secondly, on the LR1 and the spread between the 2007-built Alhena ships and the 2016-built ships we bought from Scorpio that's fixed with scrubbers, I mean, the spread is significant. I don't have the exact number on my hands here, but in an oil price environment, where bunker prices have been touching, you know, $1,200 a ton and today are down between $900 and $1,000 per ton, it varies quite significantly. The scrubber value has also increased over the past month as oil prices have gone up, and it's widened, significantly. Okay. Then if I may follow up. So when you say, of course, I mean, rates have improved strongly towards the end of the quarter, but they started off, or at least the kind of mid-quarter was kind of weak. So where are you then booking MRs at the moment? I mean, then Q2, if you were to start guiding for Q2 now, I then imagine the average rates would be substantially higher than again. So that's a question. Then second, I mean, you're referring to when the pricing is right for older assets. I think most analysts have your vintage, if we can say that, LR1s at the moment, marginal premiums to scrap value. Is scrapping an alternative of 2006, 2007 built LR ones in this bunker price environment, or are there sellers at levels well above scrap or buyers well above scrap at the moment? Okay. To comment first on the LR ones and the older ships. We believe our ships are in good shape and suitable to trade, so we continue to trade them. In a strong market, older ships will generate decent earnings. Hopefully, that answers that question. With respect to the MRs, it's true that, you know, the quarter started out significantly lower than where it is today. It's also worthwhile to note that some of the fixtures that are being done today in the U.S. Gulf area, well, have been done in the U.S. Gulf area since, you know, the middle of February, have been very high. That's probably contributed a fair bit to our MR result for the quarter. Okay. As we've been positioned for that. Okay. I mean, just to ask you directly then, I mean, the current average assessments from brokers where they are saying, you know, eco LR1s with scrubbers, they should be earning, you know, $30,000-$40,000 a day, and MRs on average with strength basically in every region should be earning, well, $20,000 or $16,000, $17,000, $20,000 a day. Is that according to your view as well? Yeah. That's not off the mark. Okay. Especially in terms of MRs, I'd say whether you're east or west, you should be above $20,000 a day on a modern LR1 that's trading in the east. Yes, you're above $30,000 a day on new business that you're entering into. Fantastic. Thank you very much. The next question is from Ola. Ola, you're on mute, if you want to unmute yourself to ask your question. Yeah. Oh, sorry. Yeah. Congratulations on the perfect timing on the Scorpio Tankers buy. I want to just ask quickly, are you confident to make a profit in the Q2 this year? Yeah. Thank you all for your question. I don't think we are giving guidance on Q2. If you had to do that, we'll send out a stock announcement on it. Don't do that in this call. Okay. Thank you. Thank you. There are no more questions pending at the moment. If you have a question, please speak now. Otherwise, we'll be coming to the end of the presentation. We have come to the end of today's presentation. Thank you for attending Hafnia's fourth quarter 2021 financial results presentation. More information on Hafnia is available online at www.hafniabw.com. Goodbye, and thank you for joining.