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Overview of HMM. Hyundai Merchant Marine Co., Ltd. (“HMM”) was established in 1976 and is one of the leading global logistics company “HMM” has a highly diversified and stable revenue ; Container, Tanker, LNG carrier and Ore/Coal carrier
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Overview of HMM • Hyundai Merchant Marine Co., Ltd. (“HMM”) wasestablished in 1976 and is one of the leading global logistics company • “HMM” has a highly diversified and stable revenue ; Container, Tanker, LNG carrier and Ore/Coal carrier • HMM is amember of The New World Alliance (TNWA) with APL&MOL, and Grand Alliance(GA) with OOCL, NYK, MISC and HLC • 2007 Revenue Breakdown USD 5,480 Mil.
Revenue 2007 USD revenue rose by 11% YoY to USD 5,480 Mil. from USD 4,955 Mil. Reasons for change in revenue ① Addition of container capacity (mainly in Asia-Europe) ② Increase in container freight rates (Asia-Europe & Intra Asia) ③ Strong Baltic Dry Index (BDI) • Revenue • Quarterly • Accumulative 5,480 4,955 1,527 1,444 3,938 1,251
Operating Profit • 2007 Operating Profit grew by 231% to USD 338 Mil. from USD 102 Mil. in the same period of 2006 • What caused the strong OP? ① Better than expected Asia-Europe and Intra-Asia market, resulting in multiple GRIs ② Super cycle in dry bulk market caused BDI to record all time high • Operating Profit • Quarterly • Accumulative 338 111 101 227 102 -6
Business Result in 2007 • 2008 Guidance
Container – volume continues to rise • Thanks to increasing new container ships to the fleet, 2007 volume increased by 9.8% YoY to 2.37 Mil. Teu; Transpacific, Asia-Europe and Intra-Asia volume increased by 8.1%, 10.2% and 12.9% YoY respectively • 2008 expected container capacity increase 29.6% YoY, and expected volume increase to 2.94 Mil. TEU (24% ↑) • Container volume breakdown • 2006 • 2007
Tanker – drastic index movement continues • The market WS averaged 82 in 2007 vs. 99 of same period 2006 • 175 new VLCCs are to be delivered between 2007-2012, this is about 36% of existing VLCCs operating in the market • Psychological factors pushed up the WS, however, due to relatively mild winter season and lack of spot activity resulted in a sharp decline of WS. • VLCC deliveries
Dry bulk – slowing down but still high • BDI averaged 7,106 in 2007 vs. 2,951 of 2006 • BDI is recovering - Iron-ore negotiation closed by Korean, Japanese and Chinese steel producers - Australian coal exports resume - Queue increases due to port congestion in New Castle, Australia - Delays in deliveries of bulk vessels by Chinese ship yards • Baltic Dry Index (BDI)
HMM Legal Affairs & Insurance Team . AHQ (Denver) Manager S H Park General Manager D B Park EHQ (London) Manager Shane Kweon Cargo Claim Manager Y S Roh Legal Part Manager S C Hwang Jason Lee Seti Min Justin Roh Rachel Hong Chris Paik Kevin Kang Joanna Kim Yulia Hwang - C/P Disputes - Litigation - Casualties - Contract / Legal Matters - CNTR Cargo Claim - Bulk Cargo Claim - CNTR Box Claim - Recovery Claim - Hull Insurance - P&I Insurance - TT Club - Terminal Insurance
What would shipping companies want its lawyers? • Little information on Chinese Maritime Law and Practice • Little information on Chinese Law Firm’s evaluation & Costs • Still depend on P&I Club’s recommendation • Shipping companies’ concerns - Difficulties to prepare evidences, when filed in court. - Huge (Overestimated) deposit or guarantee without presentation of claim breakdown - MSA (government authorities) involvement and slow progression - Quick response from the lawyers