HMM reports more than 40-fold profit jump

South Korea’s national flagship carrier HMM has seen record profit for 2021, driven by a prolonged freight rate momentum.

The container shipping company’s profit surged more than 40-fold to KRW 5,326 billion ($4.4 billion) in 2021 from KRW 124 billion in 2020.

What is more, revenue rose more than two-fold to KRW 13,794 billion in 2021 from KRW 6,413 billion in 2020.

HMM’s operating profit increased more than seven-fold to KRW 7,378 billion in 2021 from KRW 981 billion in 2020.

“Revenue and profits reached a record high in 2021, primarily driven by high freight rates and efficient fleet operations, including twelve 24,000 TEU containerships,” the South Korean company explained.

In September 2020, HMM took delivery of HMM St Petersburg, the final of twelve 24,000 TEU boxships ordered in 2018. Therefore, 2021 was the first full year for HMM to have the twelve new containerships in operation.

The containership giants feature a length of 399.9 meters and a width of 61 meters. All 12 vessels have been fitted with scrubbers, and feature an optimized hull design and energy-efficient engines.

In mid-2021, the company also ordered twelve 13,000 TEU LNG-ready boxships. To be built by Daewoo Shipbuilding & Marine Engineering (DSME) and Hyundai Heavy Industries (HHI) yards, the newbuilds will be delivered in 2024. All ships will be installed with hybrid scrubbers and designed to be LNG-ready.

Being eco-friendly, the units will support HMM’s goal of reducing CO2 emissions in its container fleet by 70% by 2030 compared to 2008 and achieving net-zero carbon emissions across its entire fleet by 2050.

Expectations for 2022

Increasing demand from the global economic recovery and growing geopolitical tensions have put upward pressure on oil prices in 2022.

As a result, the price gap between low sulfur fuel oil (LSFO) and heavy fuel oil (HFO) is expected to widen, according to HMM.

“The scrubber-fitted capacity of HMM containerships is more than 80%, which will be able to respond to rising oil prices effectively,” the company added.

The global average installation ratio is about 30%.

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