HMM announces the strongest financial report in history! Full-year net profit of 4.4 billion US doll

A number of international shipping companies have successively announced their results and forecasts for the full year of 2021, and HMM tells everyone that there will be blessings in the future...

Going back to July and August 2016, if we had to choose a container liner company that was most likely to fail, it would not be Hanjin, PIL, APL or UASC, but Hyundai Merchant Shipping at that time!

Internally, the company changed its name and surname to invest in KDB, one of the largest banks in South Korea. Not only did the company no longer have to worry about lack of money, but it also became the "national" shipping company in South Korea and the largest shipping company in South Korea; externally, shipping The market is fueled by the epidemic, and the series of large container ships ordered by HMM a few days ago happened to be launched one after another during this wave of epidemics. This shipping company has become the most amazing shipping company in the industry!

On the 15th, South Korea's flagship operator HMM reported that its full-year revenue in 2021 will be 13,794 billion won (about 11.5 billion U.S. dollars), a year-on-year increase of 115.1%. Net profit in 2021 totaled 5,326 billion won ($4.4 billion), an increase of nearly 4,200%. The previous year was only US$100 million (net profit of KRW 124 billion in 2020). After 21 consecutive quarters of losses and the brink of bankruptcy, the company finally turned a profit in the third quarter of 2020.

It is reported that revenue, operating profit and net profit are all the highest in the company's history, and they all exceeded market expectations.

South Korea's largest and the world's eighth-largest liner company attributed last year's outstanding earnings to "higher freight rates," saying the profit growth was mainly due to higher freight rates on routes from Asia to the Americas and Europe. "The fourth quarter is typically a low season for the container shipping business, but higher volumes on the Asia-American route due to major promotions such as Black Friday boosted demand and boosted rates," the company said in a release. "

Plus, and its main strategy of installing scrubbers for ship deployments – the company uses scrubber technology for over 80% of its vessel capacity, compared to the industry average of around 30%. "The price gap between LSFO (low sulphur fuel oil) and HFO (heavy fuel oil) is expected to widen," HMM said, adding that it would be "effectively able to respond to rising oil prices".

HMM will save fuel costs through scrubber-fitted vessels operated in partnership with THE Alliance, as will alliance members that are expected to co-bulk; however, due to vessel sharing agreements, when loading LSFO-burning vessels operated by other THE members, HMM will also face paying higher fuel costs.

Market analysts added that the company's increased capacity was also an important factor. With the help of the South Korean government, the company is said to add 20 container ships in 2021, including 12 24,000TEU container ships.

HMM did not disclose revenue growth this year, but it appears to be growing faster compared to THE alliance partners Hapag-Lloyd and ONE, suggesting the company has a higher average rate per TEU.

Unlike some of its larger peers, HMM continues to contract with smaller clients on the Asia to Northern Europe route, carrying more profitable spot and short-term contract cargoes, according to forwarder sources.

In the fourth quarter, HMM's revenue rose 121% from a year earlier, from $1.68 billion to $3.7 billion, matching ONE's 122% growth but significantly higher than Hapag-Lloyd's 104%. That could mean that HMM signed more long-term contracts in the fourth quarter, slowing its exponential revenue growth.

However, other factors may also be at play, as all carriers that have reported fourth-quarter volumes have so far seen volumes drop due to congested supply chains and a lack of open charters to meet excess cargo.



HMM deployed more than 40 additional ships last year, mainly serving the trans-Pacific region, but some of its ships experienced severe berthing delays at U.S. West Coast ports.