Welcome to Hafnia's third quarter 2022 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 pleased to turn the call over to Hafnia CEO, Mikael Skov.
Thank you. My name is Mikael Skov, and I am the CEO of Hafnia. Let me welcome you to Hafnia's third quarter 2022 conference call. With me here today I have our CFO, Perry van Echtelt, our EVP Commercial, Jens Christophersen, and EVP and Head of the Investor Relations, Thomas Andersen. The four of us will present Hafnia's third quarter 2022 financials. Today's presentation agenda consists of four key areas. We will begin with an overview and key highlights of the quarter, followed by the financials for the third quarter of 2022. Next, we will provide commercial updates and an outlook on the product tanker market, and finally, conclude the presentation with Hafnia's ESG governance. Moving on to slide number two. You should all be aware and take note of the mandatory disclaimer. Slide number three.
Let me begin by giving an overview of Hafnia and key updates in the third quarter. Hafnia is one of the world's leading tanker owners and operators within the product and chemical tanker market. We are a fully integrated shipping platform with our own in-house technical management and chartering teams in Asia, Europe, the Middle East, and the USA. Our technical management team ensures that the highest safety and environmental standards are maintained on board, while our commercial team manages more than 110 third-party vessels in the pools. Our business model is also robust, with diversified revenue streams such as our bunkering team, who are now buying bunkers for more than 1,000 vessels for our pool platform and third-party owners. At the end of the third quarter, Hafnia commercially operates a fleet of over 240 vessels.
We own and have chartered in a diversified portfolio of 129 vessels. Our own vessels have an average broker valuation of $4 billion, giving Hafnia a net asset value of around $2.9 billion. Being the largest operator of product and chemical tankers in the world, Hafnia's fleet's low average age of 7.6 years, and scale, enables better utilization and improved earnings capability. With improving market fundamentals and a strong winter market approaching, the outlook for the product tanker market remains strong on the back of low inventories and changing trade flows leading to increased ton-miles. Lastly, we also have a clear ESG profile.
With the growing impact of environmental regulations and increasing demand for social and governance focus, Hafnia is well-positioned and takes all responsibilities seriously to minimize our carbon footprint, as well as ensure the most optimal working environment for our organization. Moving to slide number five. Moving on. Hafnia today provides a much wider and deeper value proposition. This has been achieved through thoughtful consolidations and understanding the market and the needs of all of our stakeholders. Since our listing in late 2019, we have grown significantly and are now the world's leading product and chemical tanker company. Over the last couple of years, Hafnia has concluded two key strategic acquisitions and two joint ventures, cementing our firm foothold in the market. We also continue to expand our adjacent businesses by extending our offering across our pool platforms.
We now manage pools in every product segment and in the chemical segment as well. This allows us to operate on a larger scale and unlock synergies across our different business units. With the volatile global environment in the last couple of years, we had to navigate through them cautiously. The various acquisitions have increased the overall leverage of Hafnia, raising our cash flow breakeven levels. As a result, we have been actively working on our capital structure by reducing our leverage through refinancing deals and capital raising. We have reduced our overall leverage, allowing us to take advantage of future opportunities. These various factors underscore Hafnia's commitment to growing our platform to maximize stakeholder value and exhibit that we follow through on our intentions. Slide number 6. Let me continue by focusing on Hafnia's creation of shareholder value.
Even in challenging markets, Hafnia has always demonstrated the ability to produce shareholder value. Hafnia has a very transparent dividend policy of 50% net profit. We have consistently been paying dividends of 50% of net profit and have a total shareholder return of over 250% since the start of 2021. Relying on our ability to deliver strong shareholder returns, I'm pleased to announce a 50% dividend payout of $0.2801 per share or $140.1 million this quarter. With that, including the share buyback in 2020, Hafnia has a total shareholder distribution of $357 million, representing an industry-high payout ratio of 57%. Hafnia's peers, in general, have only started shareholder distributions this year through a combination of dividends and share buybacks.
With the acquisition of CTI and 12 LR1s in early 2022, we increased our leverage and cash flow break-even. Hafnia has taken full advantage of the upturn in the tanker market. Year-to-date, net profit from the acquired fleet has been above $110 million, including the gain from the sale of the stainless steel vessels of $11.7 million. The acquired fleet value has also increased greatly since. Based on the third quarter average broker valuation, the acquired fleet has increased by 27%, with the chemical fleet increasing by $176 million, and the 12 LR1s increasing by $116 million. I would like to take this opportunity to thank our team at Hafnia and our trusted partners who have all been instrumental in these record-breaking results.
Looking ahead, we will seek to build on this momentum to produce even greater results. Our robust business model, active management strategy, and expansion in 2022, contributing to our modernized fleet, can only flourish within these favorable market conditions. Slide number 7. Moving on, improving market conditions has allowed Hafnia to pursue our delevering objectives successfully. We remain committed to enhancing our shareholder returns, and with that, we have adjusted our dividend payout ratio upwards from the existing 50%. With higher rates and increased fleet valuations, Hafnia liquidity and net loan-to-value have improved greatly since the acquisitions in early 2022. As we continue coping with the rising interest rate environment and lowering our cash flow breakeven, we have revised our dividend payout ratio, subject to meeting our net loan-to-value ratios.
From the fourth quarter of 2022, Hafnia has initiated an updated dividend policy with the dividend payout ratio to be adjusted according to quarter-end net loan-to-value. Should our net loan-to-value ratio be 40% or below, our dividend payout ratio will increase to 60% from the existing 50%. If it reaches 30% or below, our dividend payout ratio will increase to 70% and 80% if net loan-to-value ratio goes to 20% or below. This ensures Hafnia can pursue our objective of delevering and reducing our cash flow breakeven and, at the same time, create a clear commitment to shareholder return. Slide number 8. Let me move on by providing an ESG update. On top of excellent commercial performance and notable consolidation efforts, Hafnia also has a strong focus on ESG.
I'm pleased to announce that as part of our contribution to the decarbonization of the shipping sector, we have collaborated with Clean Hydrogen Works to explore the development of a new global-scale clean hydrogen ammonia production and export project. Named Ascension Clean Energy, this project will also aim to capture up to 98% of the carbon dioxide emissions from its processes, providing a cost-effective and scalable pathway to supply carbon-free energy. This marks a strategic step in shaping the future of the Hafnia transport portfolio, utilizing purpose-built vessels against long-standing contracts in the zero-carbon space. For 2021, across Hafnia's own fleet, our carbon intensity as measured by the Annual Efficiency Ratio was 5.22 grams per ton-mile, which is 10.9% better than the present IMO baseline.
We're working hard to reduce our current fleet's carbon intensity to 3.35 grams per ton-mile by 2028, meeting the IMO's 2030 target two years in advance. We are well on track to achieve that. In addition, Hafnia is constantly looking out for vessel optimization initiatives to reduce our emissions into the air. You can also see from the graph the various initiatives we have piloted and their respective carbon reductions over our drydocking cycle. We are always looking for potential partnership opportunities to accelerate our environmental initiatives and improve our vessel efficiency. By that, I will hand it over to Perry who will take us through the financials.
Thanks, Mikael. If we move to page 10, the spot market in the third quarter started strong on the back of an already solid second quarter. We saw a growth in global oil demand and higher utilization of the worldwide product tanker fleet as it continued to be influenced by low inventories. As a result, we are pleased to announce that Hafnia has delivered the best quarterly result in our company's history for the second quarter in a row. The third quarter generated a TCE income of $407.6 million, bringing our year-to-date TCE income to $919.3 million. Building on that, we've recorded a net profit of $280.3 million for the third quarter and $487.8 million for the first nine months of the year.
The recent increase in activities and rates has benefited our fee-focused business, such as the management of third-party vessels and buying bunkers on behalf of third-party clients, resulting in $12.1 million for the quarter and $26.6 million of revenues for the first nine months. This strong result enables us to distribute $140.1 million in total dividends or $0.2801 per share to our shareholders, the highest distribution in our company's history. This represents a payout ratio of 50% for the quarter and brings our total dividend payout for the year to $243.7 million. For the quarter, we also saw a return on equity of 74.8%.
If we move on to the next slide, as you can see, the balance sheet remains strong. We have a cash position of $151.5 million and total liquidity of more than $400 million. With the increase of interest rates for U.S. dollar financing, we have gradually increased our interest rate hedging position earlier in the year to 62.5% at the end of the third quarter at a weighted average hedge rate of 1.69% to lock in the rates to match the tenor of our debt profile. With higher asset prices and healthy cash generation on the back of a strong increase in rates, we have also noted a significant decrease in our net leverage ratio, down from 55.7%-43%.
Cash flow from operations from the strong quarter has been allocated towards reducing drawn amounts on our revolving credit facilities as they have the highest flexibility in the long term. We are also constantly working on refinancing part of our balance sheet to reduce our funding cost and cash flow break-even so that we build both market resilience and enjoy significant operating leverage in these rising markets. If we move to the next page, we can look at the TCE breakdown. For the third quarter, we achieved an average TCE of $36,367 per day per vessel, more than tripling the rate a year ago. As of 16th November 2022, 67% of the total earning days in Q4 2022 were covered at an average of $35,916 per day.
The covered rates for the fourth quarter remain strong, and we can expect the high rates to continue amidst the longer trading rounds as the West will continue to replenish their inventories and replace imports from Russia as the E.U. sanctions come into effect. For the week beginning of the 7th of November, Hafnia's pools earned an average for the following segments: $78,084 per day for the LR2 vessels, $39,609 per day for the LR1s, $34,513 per day for the MR vessels, $29,527 per day for the Handy vessels. Moving to the chemicals, that was $47,868 per day for the chemical MR vessels and $44,408 per day for the chemical Handy vessels.
If we move to the next page on OpEx, which includes our vessel running costs and technical management fees, was on the basis of 10,334 calendar days, resulting in an average of $7,135 per day. All-in G&A expense per day for the quarter remains low and was $739 per day. Our operating cash flow break even for the full fleet in the third quarter was $14,975 per day. The acquisitions in early 2022 have increased our leverage levels, while the increase in base interest rates, LIBOR and SOFR, has also added to this. Our traditional industry-low break even levels and access to funding have enabled us to execute these strategic transactions, which played a huge role in the strong results we published today.
As mentioned earlier by Mikael, the net profit from the acquired fleet has been above $110 million for the first nine months of the year. Looking forward, we will continue our focus on bringing back our cash flow breakeven across the fleet to position ourselves strongly for the future. We are also constantly benchmarking our performance against our peers, and I'm pleased with the relative performance. This comes from our keen understanding of market conditions and the quality of daily commercial decision-making. If we move to the next page, with the strong upturn in the product tanker market this year, we can expect 2022 to record the strongest net profit in our company's history, and 2023 will continue to be strong.
The combination of the recent fleet acquisitions and large exposure to the spot market enable Hafnia to take full advantage of the strong rates. Looking at the various scenarios here on the page, where we apply recently realized rates into our forecast and a consensus of the various analysts that cover us, you can see the strong earnings potential that Hafnia has for 2022 and 2023. Jens, why don't you take the next few pages?
Thank you for that, Perry. The next few pages show the global oil outlook and our expectations for the product tanker market. Despite the slowdown of the global economy and higher commodity prices, global oil demand is, according to IEA, expected to increase by 2.1 million barrels a day in 2022, reaching a demand of 100.7 million barrels in Q4 2022, and growing by 2.3 million barrels to 103.0 million barrels by the end of 2023. The OPEC+ alliance has disrupted global oil supply with its recently announced cut of 2 million barrels daily. This, combined with an EU ban on Russian crude and refined oil products coming into effect, is set to redraw the global trade lanes positively. We remain very bullish on the product tanker market.
We can see the level of product tanker deadweight ton deliveries in the last five years are at a low, and with expected growth in oil demand, we can envisage utilization of product tankers to increase. On the graph to the right, we can see that clean petroleum product tankers with cargo in October have trailed off from the peak in August and September, but are still at very high levels. Going into November, we can see increasing utilization. As the E.U. sanctions on Russian products come into effect, utilization is expected to increase further and reach levels like in May 2020. Slide 17. Global oil trade routes are being redrawn because of E.U. sanctions and self-sanctioning, leading to longer trading routes. Volumes of clean petroleum products loaded daily worldwide have increased by 9% from Q1-Q4 2022, and the increase originates outside Russia.
Whilst the impact on tankers' earnings appears to be significant now, the daily volumes of clean petroleum products loaded in Russia on tankers destined for the E.U. continue to be about 0.7 million barrels per day for the four main Hafnia segments, Handy, M.R., LR1, and LR2. With less than three months before the E.U. embargo on refined Russian products, E.U. countries have yet to diversify more than half of their pre-war import levels from Russia. By February 2023, the E.U. will have to buy that cargo volume from the U.S. Gulf or the Middle East, resulting in significantly longer transportation distances for oil going into the E.U. We expect these volumes to the E.U. to continue dropping before the embargo comes into effect.
This drop in Russia's export volume will be compensated by a similar increase to regions outside of the EU, again, with significant ton-miles gain on the horizon. Slide 18. In the third quarter, the product tanker market experienced a decrease in laden distance. This was despite an increase in cargo volumes, hence resulting in reduced ton-miles. However, this was partially offset by an increase in ballast distances. The fourth quarter has seen laden distance increasing again to levels higher than the second quarter, not attributed to the seasonal spike typically experienced in the first quarter. We also notice an unusual ballast duration spike in the fourth quarter, as tonnage trading Russia do not triangulate, and generally, we've seen tonnage ballasting longer distances towards the strongest spot markets. Example given, from the west to the east at the end of Q3, early Q4. Slide 19.
Moving on to the refining sector. Global refinery runs in October have fallen to 80.4 million barrels a day, mainly attributed to declines in the Atlantic Basin, but offset by higher runs East of Suez. Looking at October's export levels, we're still waiting for new refineries in the Middle East to operate at full capacity. Saudi Aramco's Jizan refinery reached 125,000 barrels per day in October, reaching 30% of its 400,000 barrels capacity, and is expected to reach full capacity by the end of the year. Meanwhile, Kuwait Petroleum Company Al Zour Refinery is close to its first diesel exports. Two of the three refinery units are running today, and the entire complex, with a capacity of 600,000 barrels a day, could be up and running in January 2023.
This will help Europe in diesel imports, as they are increasingly looking to refiners in the regions, such as the Middle East, to meet a potential shortfall of diesel, as inventory levels have been dropping and sanctions on Russian products are coming into effect soon. Slide 20. With oil output set to increase in the Middle East, this will represent an increase in cargo volumes and longer voyages for product tankers. Sanctions on Russia's supply have led to the recalibration of trading routes, supported by strong demand for Middle East distillate barrels in Europe and Africa. Cargo volumes and ton-miles for clean and crude counterparts have already surpassed pre-pandemic levels. We expect this to continue increasing as the EU looks further to substitute their current imports from Russia. Slide 21. Storage levels are also a significant driver for the overall tanker market.
According to IEA, global oil inventories dropped by 14.2 million barrels in September, as lower onshore inventories in both OECD and non-OECD countries were partially offset by a surge in oil on water. The announced cut in OPEC+ oil supply will also sharply reduce a much-needed build in oil stocks through the rest of 2022 and into the first half of 2023. This leaves a significant risk for a price spike with lowered supply and depleting inventories. Inventories for clean products in the West remain below the last nine-year average, while levels in the East sit above the historical average. However, it seems clear that Eastern inventory builds mirror product groups needed west of Suez. With the start-up of significant volumes in new refinery capacity in the Middle East, we can expect clean trade volumes to increase to replenish this drop.
Historically, rates have been very strong when inventories are being built. Slide 22. Looking at the supply side, we remain bullish on the tanker market with the declining order book levels and an aging fleet. The product tanker order book is at a historical low of 5% of the total fleet, and the potential scrapping of older vessels, 25 years for Handy and MR, 23 years for LR1 and LR2, represents only a net addition of about 35 MR equivalents from today until the end of 2025. This paves the way for higher utilization of existing vessels to push the market levels even higher. Additionally, we do not expect to see rising orders for product tankers due to increasing newbuilding prices and fully booked yards. Mikael, over to you for the next couple of slides.
Thank you. We are currently on slide 24. I would now like to talk about Hafnia's holistic approach to ESG. Focus on ESG has been gaining traction over the past decade, and our responsibility is to ensure this is clearly established within Hafnia's culture. Board and leadership group anchors our ESG strategy and is responsible for the supervision and strategic direction. We have identified 19 material topics which we believe are most important to us and our respective stakeholders to ensure Hafnia is aligned with our business priorities with a long-term focus on ESG. We have an ESG function that assists the leadership group in tracking our ESG performance and progress, ensuring everyone is accountable for executing the company's sustainability ambitions. We will also report comprehensively to ensure all stakeholders know our strategy and performance in these respective areas.
This ensures that all stakeholders and employees are aligned on our ambitions, which will be key to the long-term sustainability of the company. 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.
I think we have a question from Frode Mørkedal from Clarksons.
Hiya. Let's see. Can you hear me?
Yes, we can hear you.
Question on this embargo coming up. Last time you quantified it. Now I guess it's already in motion, so to speak, but do you have any updated number on that effect from here onwards?
Hi Frode. This is Jens. We do not have a specific number of MR equivalents that we believe will come out of this. What we can conclude at this point in time is that the majority of the effect is yet to be seen on the market. So far in Q4 year to date, we have about 700,000 barrels a day of clean petroleum products that are moving by tankers from Russia into the EU and the U.K. If we look at November stats alone, that number has actually grown to almost 1 million barrels a day. From what we are seeing today, Russia is exporting as much as they possibly can ahead of the February 5th deadline next year. It looks like we'll have some busy months ahead of us.
From there onwards, we will have quite a dramatic change in trade patterns.
Yeah, I guess. It's safe to assume that it's something similar to the, let's say, 7% I think you talked about last time.
Yes.
Great. On the market, I mean, there's now a big dislocation, probably temporary, but the crude Aframaxes are $100,000 per day and LR2s are somewhat lower. Are you seeing any interest in dirtying up LR2s?
Yes. LR2s have already started to dirty up, and lately we've heard figures between 11 ships having dirtied up lately, but as high as 18. The motivation is quite clear when you look at the Aframax market in the U.S. Gulf, just to mention one. You know, that's gone to almost $190,000 a day for a dirty Aframax. The motivation to change is quite high right now. We expect that trend that will continue for a little while.
Yeah. That's good for the market, of course. Would you do the same or keep them clean?
I mean, so far our presence in the clean LR2 market is not massive and we're keeping the ships clean, but we are, you know, always open to consider that if the right opportunity comes about the corner.
Okay. If I may have a third question. On the dividend policy, I understand the motivation of deleveraging on the way up. Is this step change in the LTV thresholds a one-time thing? Should we also see it as a permanent cyclical, you know, in a few years' time when vessel values start to fall again, would you then go down on payout ratio?
Well, I can maybe just elaborate a bit on that. I don't know, Perry van Echtelt, if you want to add on afterwards. Obviously, I mean, the new dividend policy really reflects the fact that we've been through, you know, an interesting growth period, and we feel that, you know, we don't have upcoming CapEx, new build programs or anything like this. It's really a focus about returning as much capital to shareholders as we can. At the same time, making sure that we don't lose sight of having, you know, a competitive balance sheet. You know, it's not like we've made different plans or different dividend policies going forward. I mean, obviously we hope that this will, and we think this will continue for quite a while.
You know, this is really more about the fact that we have reached a certain size and therefore find it at the moment the right way to try to maximize on the dividend payout.
Okay. Thank you very much.
Do we have any more raised hands?
There's a question from Frederik Ness in the chat box. Is there any activity in chemical tanker time charter market? What is the current one-year TC rates for the various chemical tanker segments? What is our chartering strategy for the chemical tankers going forward?
That's a good question. The chemical tanker segment is quite a lot smaller than the general CPP equivalent in MRs and Handys. There's not a lot of activity in that segment. The latest movement we've seen is that a couple of traders have taken IMO 2 MRs on time charter one year at $32,000 a day. At the time when this was done, that was probably a rate that was a little higher than the rate for a standard CPP MR. Our strategy is to stay in a spot market that's currently very strong and wait for the strength to build over the winter. Gradually we'll start to engage in looking at cargo contracts that will enable us to trade these ships in around the world trade going forward.
To us, it's not super attractive to fix the ships on our own time charter. We would rather build our own competencies. Having said that, you know, yes, at some point in time, we may well time charter out some ships. Let's see. It's also a question about money, of course.
I believe we have another raised hand. I've just unmuted you. Okay. Do you still have the question? I've just unmuted you. No?
Hi, can you hear me?
Yes, we can.
Yeah, sorry. I had to unmute myself as well. I had one, I guess, a bit technical question on the dividend. There's some other Norwegian shipping companies that manage to pay dividends out of capital rather than out of profits, which basically means that investors in a bunch of jurisdictions don't pay kind of the level of withholding taxes they otherwise pay. Is that something you've looked into? Is that possible to do in your structure, do you think? Can you comment on that at all?
Yeah. Hi, it's Perry van Echtelt here. That is not something that we have looked at into detail. We'll be curious to hear what that is, so maybe we can take that offline.
Yeah, sure. Thanks a lot.
We have another raised hand from Petter Haugen. I've just unmuted you.
Yes, hello. This is Petter Haugen calling in from ABG. A quick question on the U.S. markets here. In the data, it seems as if exports, not only of crude has risen out of the U.S., but also on the product side. Could you share some observations and market intel on what is happening on the U.S. side of the product tanker markets? The reason I'm asking is also because of the SPR draws, which is now supposedly coming to an end. To what extent that has been exported in form of products or crude is, I think a question many of us ask ourselves.
Any sort of view on what the consequences of the SPR draws coming to a stop will have for the product tanker markets and general intelligent sort of data observations on the U.S. markets? Thank you.
Hi, Petter. Good question. I was not aware that the SPR draw that's coming to a stop that could potentially impact on products. Our perception was that it was a crude release to the market rather than a product release. If we look at the product exports alone in the U.S. Gulf, we've seen a high level for a good amount of time, and last week was quite an eventful week in the sense that we finally came to that famous tipping point where the number of ships available to lift cargoes was just not enough. When you look at that U.S. Gulf market, it's typically quite an aggressive market that moves very quickly up high and also the other way of course.
Last week started about $20,000 a day for the usual U.S. Gulf carriage run, and ended the week at probably closer to $70,000 a day, and there was even a $100,000 a day fixture from U.S. Gulf into East Coast Mexico. It was busy in the Gulf. I believe that the main reason behind this activity is simply that U.S. refiners are enjoying quite high margins. For that reason, they are refining as much as they possibly can, and there's plenty of off-takers for it.
That's very helpful. Thank you. If I could follow up on the asset price side. At least in our observations, it seems as if, in particular the Aframax LR2s are pricing relatively better than MRs and other tankers in general, I would say. One can of course suspect that has something to do with what type of tonnage is carrying Russian hydrocarbons out of Russia. In terms of recent transactions in the market, what would you say is a fair price now for a resale MR and a resale LR1 and LR2?
The latest transactions we've seen has been in the mid-$75 for resale LR2s. For modern resale MRs, we haven't seen much. There's a fair amount of activity going on in the market. The latest rumor in the market is that a 2016 built MR has been transacted at $40 million bucks, and that older ships continue to be sort of the flavor of the day.
Okay. Yes, yeah.
This type of market, it's really a moving target. It moves quite quickly.
Of course, we hope. Thank you.
You're welcome.
I think we have another question from Sean Nelson. I'm about to unmute you. Sean, you might have to unmute yourself as well.
Oh, hi. Thank you. I had a question more on the supply side. I know all the shipowners right now are saying that supply doesn't really have any change into 2025 or 2026. It seems to me that in past cycles, it's a rosy outlook. We see yards that were previously bankrupt coming back online. I guess I was just wondering, have you seen anything of that nature that would kind of cut back on supply rosiness?
Thanks for that, Sean. Well, basically, I think there's a big difference from, let's say, the previous upcycle and building cycle versus now. Since after 2008 and 2009, we've seen a massive consolidation of shipyards in general. The ones you referred to in the older days, which is true, that, you know, there was a tendency of trying to revive dormant shipyards, et cetera. That's not likely or the case at the moment. You know, you're seeing much more consolidated shipyard groups. The reason we are a lot more comfortable around this time is that, as you probably know, I mean, the order book is filled up with a lot of different ships than tankers. Mainly gas ships, VLCCs, container ships.
Although, of course, you are gonna see some options down the line not being utilized by owners, and therefore yards trying to sell ships, you don't just convert yard space that are building containers, VLCCs, or gas ships into product tankers. Those will be different cases. We actually think that the situation we have now, where the earliest you can get product tankers would be sometime in 2025, is not likely to change. Despite rather that prices are extremely high at the moment, so that in itself will discourage anyone from buying the product tankers. Yeah, I think it's fair to say this time around it's different, and we don't see dormant shipyards and things appearing overnight that will disturb that balance.
Do we have any more questions? Any more questions in the chat?
No, not that I can see.
We have come to the end of today's presentation. Thank you for attending Hafnia's third quarter 2022 financial results presentation. More information on Hafnia is available online at www.hafniabw.com. Goodbye.