HMM INSIDE · Group, the world's second largest steelmaker, HMM will expand market presence and...

HMM INSIDE 2010

Table of ContentsFinancial Highlights

01. Corporate Overview

02. Unit Information

03. Other Information

04. Green Management and Ethics Management

05. Appendix

trust

talent

tenacity

togetherness

Representing a central part of Hyundai

Group's scope and corporate culture,

the themes of Trust, Talent, Tenacity and

Togetherness will unify and guide HMM

through whatever l ies ahead. Both

external and internal challenges will be

met in unison with the combined efforts

of all. Without compromise, the caliber of

4T will bring the eminent potential of

HMM to the fore to carry the success of

the business to new heights.

Always with youWe Carry the Future!

Financial Highlights

FY2008 FY2009 FY2010Statements of Income(KRW Billion)

Revenue 8,003 6,115 8,087

Cost of Sales 7,286 6,561 7,324

Selling and Administrative Expenses 131 120 162

Operating Profits 587 565 601

Pre-tax Earnings 605 798 347

Net Income 677 802 437

Statements of Financial Position(KRW Billion)

Total Assets 8,282 8,341 8,818

Total Liabilities 5,424 6,127 5,867

Shareholders' Equity 2,858 2,214 2,951

Statements of Cash Flows(KRW Billion)

Cash Flows from Operating Activities 765 154 275

Cash Flows from Investing Activities 320 77 363

Cash Flows from Financing Activities 667 782 238

Increases in Cash & Cash Equivalents 221 552 400

Cash & Cash Equivalents, Beginning of Year 441 220 771

Cash & Cash Equivalents, End of Year 220 771 1,172

CAPEX (KRW Billion) 1,108 256 534

Dividend(KRW)

Dividend per share (Common stock) 500 500 500

Dividend per share (Preferred stock) 600 600 600

Liquidity (KRW Billion, %)

Cash & Cash Equivalent 785 1,042 1,193

Interest-bearing Debts 4,900 5,755 5,308

Debt Equity Ratio 189.8% 276.7% 198.8%

Net Debt Equity Ratio 144.0% 202.4% 139.4%

Financial Key Indicators

Cost StructureDebt Equity Ratio

Credit Ratings

Korea Ratings Co., Ltd. Korea Investors Service Co., Ltd.

Revenue Operating Profit

CEO Interview

HMM INSIDE 2010

President & CEO Suk-Hui Lee

What was the main driver of record-breaking earnings in 2010?

In 2009, the shipping industry suffered its worst-ever slump

and all companies had to struggle for survival. In February,

in the midst of global economic turmoil and industrial

disorder, HMM announced the business plan for year 2010,

targeting revenue of KRW 7.14 tri l l ion and operating

income of KRW 336 bi l l ion. In these uncerta in

circumstances, HMM turned around successfully in 1Q

2010 and delivered record-breaking annual results of

revenue KRW 8.9 trillion, operating income KRW 602 billion

and net income KRW 437 billion. The driving forces of this

performance were an increase in container trade volume

and freight rate; along with minimization of spot exposure

through long-term contract expansion in the Crude Tanker

Service; and a stable profit structure in the LNG Dedicated

Service.

However, success in SSI(Super Sales Initiative), conducted

at the corporate-level in 2010, and TCR (Total Cost

Reduction) were the core elements of HMM s record-

breaking results.

SSI(Super Sales Initiative)

HMM undertook methodical SSI in order to achieve an early

turnaround in 2010 based on systematic and efficient sales

reinforcement. F i rst of a l l , strategic performance

management system was set to establish the basis of a

rational performance compensation program, aiming for

employees motivation and sales force maximization.

Secondly, risk management system was activated based

on scenario management through PI (Process Innovation)

/ERP(Enterprise Resource Planning), which was settled

successfully in 2010 after its kick-off in 2008, coping with

an uncertain business environment through a flexible

operating system.

Furthermore, sales experts were cultivated through policy

reformation whilst fulfilling customers diverse needs. By

inspiring one s pride in having a partnership with HMM

through building vitality of corporate image, driven by eco-

friendly and ethics management, information acquisition

and business opportunit ies were expanded with

continuously favorable customer relationships. In addition,

sales issues were detected and resolved promptly based

on field-oriented management by top management and

PICs.

TCR(Total Cost Reduction)

In 2010, HMM conducted corporate-level cost reductions

to secure comparative advantage, focusing on operation

related expenses such as port fees, cargo cost, fuel cost

and charterage. Dry Bulk Division, in particular, had a high

cost structure due to vessels chartered during the super

cycle of 2007-2008. Although still in the red, the depth of

loss is being improved on a quarterly basis through active

TCR progress in 2010.

The success of SSI and TCR could not have been possible

without the members of HMM. Problems exist which

systems cannot handle and it was employees who led

the record of 2010 based on sales reinforcement and cost

savings.

HM

M

05+

06

What is HMM s strategy in 2011?

HMM has outlined plans to attain revenue of USD 7.6 billion

and operating income of KRW 637 billion in 2011. It is in fact

an aggressive target considering the massive order book in

place and expected slowdown in global economic growth.

However, based on the 2011 Management Target of Create

& Advance , HMM will put utmost effort into reaching the goal

of 2011 through enhancing business capabi l i ty; r isk

management; Advance 1/2/3 strategies to reinforce previous

businesses as well as opening new service routes; developing

emerging markets; and seeking new businesses to lay the

foundation for the next-generation growth engine.

Advance 1 : Reinforcement of Current Businesses

It is true that HMM s Dry Bulk Division lacks competitiveness

and has been underperforming, unlike the Liner Unit and Wet

Bulk Division, which boast respectively a superb OP margin

based on premium services and an excellent cost structure.

However, continued cost reduction effort has led to profitability

improvements and fleet replacements, imbedded with cost

strength, will be sustained during the trough of industrial cycle.

HMM has plans to expand the operating fleet (including

charters over one year) from 164 to 192 vessels by the end of

2011, with increases of 7 container and 21 bulk (1 wet bulk,

20 dry bulk) vessels. Through such Dry Bulk Div is ion

reinforcement in 2011, HMM plans to reach turnaround in the

short-term and sustain a stable business portfolio that secures

profit, free from external factors, in the long-term along with

Liner Unit and Wet Bulk Division.

Advance 2 : Reinforcement of Risk Management

Oil price management is very important especially when fuel

cost takes up 20% of COGS, with the rise in global oil price

due to political instability within the MENA region. HMM plans

to expand the proportion of bunker hedging in order to secure

stability in terms of fuel cost and minimize shocks from

volatility in the oil price. Furthermore, HMM will strive to make

greatest profit from minimum risk in 2011 through the

establ ishment of a r isk management system which

encompasses currency, interest rates and FFA etc, along with

enhancing research capability.

HMM INSIDE 2010

Advance 3 : Reinforcement of System Management

In 2011, information and customer-oriented work processes

will be integrated through PI2(Process Innovation Phase 2).

Field-oriented innovation is being designed that exceeds the

level of PI1 and the process link system between HQ/Regional

HQ/Branch will be reinforced. In the meantime, a corporate

cooperative system is planned to be established through

information integration, that will widen the visibility of the entire

work process and enhance work convenience.

Create 1 : Emerging Markets Development

In 2011, HMM will concentrate in advancing into markets with

high potential growth that include the emerging markets of

India, the Middle East, South America and Africa along with

China, the biggest market in the world. Regarding the

container market, purchasing power parity is on the rise from

emerging continents after the financial crisis of 2008 and HMM

has therefore recently established the Emerging Trade

Management Team, which will serve South America, Africa

and Australia etc in the future. Furthermore, establishment of

foreign branches in Sao Paulo-Brazil, Moscow-Russia is under

consideration, which will make active advancement into the

South-North route possible.

With an additional contract in progress with Hebei Steel

Group, the world's second largest steelmaker, HMM will

expand market presence and sales force in the Chinese

transportation market, when Southeast Asia HQ, which was

previously under HMM HQ s control, will self-support in terms

of bulk operation that will expedite emerging and niche market

development of India, Australia and Vietnam etc.

Create 2 : Development of New Growth Engine

The era of creating profit and value through the traditional

means of maritime transportation service is over. Under the

Mission of We convey scarce materials and resources to

where they are needed throughout the globe, contributing to

possession of rich and happy lives. Every single capacity we

hold, are to be implemented for technical development and

realization in establishing efficient transportation/logistics

process between individuals and corporations around the

world , HMM plans to enter new business areas such as

project logistics, heavy lift transport, bulk terminal development

and offshore transport which will be the foothold to global

logistics reinforcement and integrated logistics business. In

consequence, breaking away from the traditional existence of

simple transportation service provider, HMM will be a value-

developing partner that conveys a new paradigm to all

customers around the world.

HM

M

07+

08

CorporateOverview

01

Business Portfolio

Fleet

Guidance

Corporate Overview

trust

Corporate Overview

HMM INSIDE 2010






05. Appendix

Business Portfolio

11+

12H

MM

(KRW Billion)

FY2008 FY2009 FY2010

Container 5,289 4,128 5,721

Wet Bulk 1,495 1,189 1,113

Dry Bulk 1,219 798 1,253

Total 8,003 6,115 8,087

(No. of vessels)

2008 2009 2010

Container 53 61 62

Wet Bulk 50 53 43

Dry Bulk 43 48 59

Total 146 162 164

(KRW Billion)

FY2008 FY2009 FY2010 Container Revenue 5,289 4,128 5,721

Operating Profits 228 -446 669

OP Margin 4.3% -10.8% 11.7%

Wet Bulk Revenue 1,495 1,189 1,113

Operating Profits 194 58 7

OP Margin 13.0% 4.9% 0.60%

Dry Bulk Revenue 1,219 798 1,253

Operating Profits 165 -177 -75

OP Margin 13.5% -22.2% -6.0%

Total Revenue 8,003 6,115 8,087

Operating Profits 587 -565 601

OP Margin 7.3% -9.2% 7.4%

Fleet Composition Revenue Breakdown

Operational Result

Owned and Chartered over one year

Above data is year-end basis.

Fleet

HMM INSIDE 2010

(As of December 31, 2010)

Owned Chartered Total

No. 1,000 Dwt Capacity No. 1,000 Dwt Capacity No. 1,000 Dwt Capacity

Container* 6,000TEU 9 799 68 17 1,404 119 26 2,203 187

4,000-6,000TEU 13 843 64 8 504 39 21 1,347 103

4,000TEU 15 347 28 15 347 28

Container total 22 1,642 133 40 2,254 186 62 3,897 319

Wet Bulk Gas carrier** 6 454 790 6 375 581 12 829 1,371

Crude tanker 7 1,887 12 2,731 19 4,617

Other tanker 2 101 10 536 12 637

Wet bulk total 15 2,441 28 3,642 43 6,083

Dry Bulk Capesize 10 1,636 6 1,108 16 2,744

Panamax 11 832 11 832

Supramax 14 739 14 739

Handy 1 38 11 304 12 342

Heavy Lift 6 164 6 164

Dry bulk total 11 1,675 48 3,148 59 4,822

Total 48 5,758 116 9,044 164 14,802

* Contaner capacity : 1,000 TEU

** Gas carrier capacity : 1,000 CBM


Fleet Profile

(No. of vessels)

2011 2012 2013

Own Charter Own Charter Own Charter

Container 6,350 TEU

12,600 TEU 5

Dry Bulk Capesize 4 3 1 1

Panamax 3 1

Supramax 4 2 1 1

Handy 2 1

Heavy Lift 4 1

Total No. of new vessels 4 16 3 10 1

Fleet Expansion Plan

Owned and Chartered more than two years






05. Appendix

Guidance

13+

14H

MM

FY2010 FY2011(E) YoY Growth

Revenue (KRW Bn) 8,087 7,944 2%

Revenue (USD Mn) 6,972 7,565 9%

Operating Profit (KRW Bn) 601 637 6%

Volume (1,000 TEU) 2,903 3,357 16%

CAPEX (KRW Bn) 534 486 9%

2011 Performance Guidance

(No. of vessels)

End of 2010 Fleet Change End of 2011

Owned Chartered Total In Out Change Owned Chartered Total

Container 22 40 62 15 8 7 22 47 69

Wet Bulk 15 28 43 7 6 1 14 30 44

Dry Bulk 11 48 59 33 13 20 13 66 79

Total 48 116 164 55 27 28 49 143 192

Fleet Plan

Enforce Core Business

Capability

MaximizeProfitability

Create Profitability

AdvancedManagement

Minimize Busiess Risk

DevelopNew

Business

ImproveSystem

Management

TightenRisk

Management


UnitInformation

02

Liner Unit

Bulk Unit

Overseas Organizations

Unit Information

talent

Unit Information

HMM INSIDE 2010






05. Appendix

Liner Unit

Introduction

Container Service

Asia-US TradeAs a main engine for container business, the Asia-US trade of HMM has occupied about 40% of the totalcontainership capacity. HMM has planned to diversify its service network on the Asia-US East Coast tradewhich is not yet as developed as other transpacific trades. Additionally, the inauguration of a new terminal inLos Angeles has contributed to providing a premium service to customers. Equipped with two berths andfour cranes, CUT(California United Terminals), which was opened in February 2011 is able to handle 1.2million TEUs a year and it has on-dock rail facilities which can provide direct non-stop connections betweenvessels and trains for inland cargoes.

Asia-Europe TradeHMM, with its partners TNWA(The NewWorld Alliance), has provided five routeson the Asia-North Europe and Asia-Mediterranean trades. Through years ofcooperation in a strategic alliance, wehave consistently sought to expand ourservice coverage and have reinforced ourposition in the European market throughinitiatives such as the Asia-Adriatic Seatrade which we launched last year.

Intra-Asia TradeIntra-Asia volumes are expected to rise substantially due to several positive factors. The petrodollar gainfrom rising oil prices in the Middle East is injected into huge scale construction projects and is boostingconsumption. Moreover, both China and other emerging markets including India and ASEAN countries haveshown constantly high growth, as expected. However, the volatility of capacity in this trade is bigger than inother trades, so it is necessary that carriers pay attention to managing its risk of overcapacity. HMM hastaken all efforts to adjust capacity to demand by analyzing market conditions constantly and respondingquickly to any changes.

Emerging TradeAs the future outlook for emerging economies is brighter than for developed countries, HMM establishedthis year an Emerging Trade Management Team for South America, Oceania, Africa and Russia in order toimprove its competitiveness. With this new organization, we will take a variety of strategic measures todevelop highly profitable cargoes and increase our market share in this trade.

17+

18H

MM

Liner Unit

HMM INSIDE 2010

Intermodal ServiceExclusive rail arrangements with cutting-edgeinfrastructure provide greater coverage in eachof the crucial regions.

From the ocean to inland, HMM and its partnersin TNWA, such as APL and MOL, cover most ofthe globe with container services to and fromthe world’s major container ports.HMM’s container business delivers quality doorto door services rapidly across its globalnetwork. To retain its advantage, the companyutilizes many facilities worldwide: HII(Hyundai Intermodal, Inc.) in the U.S., premium block train services inEurope, and various feeder and barge services in Asia.

HII provides U.S. customers with DST(Double Stack Train) services; Transcon services (a priority, nonstoprail provision between Los Angeles and New York); and direct services between Los Angeles and Atlanta.The subsidiary also offers valuable inland services that combine rail and truck transportation in one, whilstserving all major rail ramps in North America through its exclusive contract agreements with multiple railcarriers: BNSF, Union Pacific, Norfolk Southern, CSX, Canadian Pacific and Canadian National.

In Europe, HMM provides a guaranteed service (one train containing 76~92TEUs) to BCO(Beneficial CargoOwners) from European ports (including Hamburg and Koper) to inland areas (Slovakia, Poland, Hungary,Czech Republic, etc). The company also enhances shipper convenience with its Intra Europe Service -carrying finished product from inland EU areas to Great Britain and other EU countries.

From the Asian market, HMM uses know-how and decades of experience to provide shippers with aresourceful inland connection system. In China, HMM provides barge inland service connecting Hong Kongwith the Pearl River Delta Area, and Shanghai with the Jiang River Area. As the economies of Asia --especially China, India and Vietnam -- continue to develop, HMM will keep on increasing its investment indepots, CY(Container Yards), and other key infrastructure.

In response to the needs of customers, the company is also developing value-added inland intermodalservices within its existing logistics network. HMM also operates a team to construct and implement diversetransportation solutions, tailored to the logistics needs of shippers.






05. Appendix

19+

20H

MM

Terminal Service

CUTCalifornia United Terminals is located in the Port of Los Angeles in Southern California, relocated from thePort of Long Beach in December, 2010. CUT is renowned for its efficient service and excellent locationwithin the harbor, and it has played an important role in the PSW(Pacific Southwest) area as HMM’s maingateway to and from Asia. Over the years CUT has developed a coast-wide reputation for efficient andexpedient turnaround of cargo and an unparalleled level of customer service. The new location isstrategically located allowing for even greater and more comprehensive cargo handling capabilities, and thecontinued opportunity to exceed the customers’ expectations.

WUTWashington United Terminals is located in the Port of Tacoma, Washington. HMM’s main gateway to andfrom Asia, WUT has a 102-acre terminal, plus designated 23 acres of on-dock rail facilities which canprovide non-stop connections directly between the vessels and trains for inland cargo. WUT added twoadditional Post Panamax cranes in early 2009, capable of lifting cargo of up to 100 tons in weight and 32.6x 15.2 meters in size.

KHTKaohsiung Hyundai Terminal is located at Pier 118/119 of No.4 Container Terminal Center at KaohsiungPort with a land area of 258,058 square meters. It has a 640 meter-long quay and 907,276 TEUs of annualhandling capacity. KHT handles not only HMM cargo, but also third-party business cargo as a result of itssuccessful sales division. To increase efficiency, KHT plans to add 1 new gantry crane in 2011.

HPNTHyundai Pusan New-port Terminal is a world-class port with state-of-the-art facilities, handling 2 millionTEUs per year. HMM has adopted a 24-row capacity container crane with a tandem spreader system aswell as an un-manned automatic yard crane (Rail Mounted Gantry Crane) for efficient operation. HPNTopened in February 2010 and aims to be one of the most productive terminals in Asia.

RWGRotterdam World Gateway is located in Rotterdam, the Netherlands. HMM was selected as one of its keyoperators in 2007, along with other major maritime companies such as DPW, APL, MOL, and CMA CGM.RWG will open in 2013 and aims to be one of the most efficient and fully automated terminals in Europe.

Container Interview

Liner Unit

HMM INSIDE 2010

HMM outperformed the market in 2010. What was the main driver?

Our daring decision, based on market insight from our internal global network, to go back intothe market was the main driver of the result. In addition, effective asset utilization through yieldmanagement and immediate response from the corporate strategic decision maximized theprofit. Above all, our colleagues’ effort with the sense of ownership realized the strategy.

Year 2010 started with unstable economic environments and mixed signals of optimism and pessimism.Only a few research institutions and analysts forecasted the notable rebound while most had a scepticalview. Looking at the result, the revenue of Liner Unit was KRW 5,721 Billion (YoY 38.6%) and operatingprofit was KRW 669 Billion (turned black).

Market insight via organic global networkHMM’s organic global network is not only the sales network but also an intelligence network which iscollecting information in the real market place. Supported by the company’s culture and systems , HMM’sglobal network frequently shares meaningful regional information. While it became difficult to forecast themarket with traditional supply & demand based information, our organic global network played an importantrole in drawing market insight from the well known “Market Figures” and “Market Index”.

Turning words into actionAfter close analysis of published market data and internal market insight from the real market, we decided todeploy the fleet in advance and expand service coverage. Although the market is still uncertain, we’veresumed several services that were suspended during 2009 and opened a new loop to the Adriatic Sea andSouth America. As soon as we developed the corporate strategy, we implemented it without hesitation. Wedeployed the vessels and expanded sales capability. We believe that our prompt action was one of the keysin achieving higher profitability than the market average.

Yield ManagementConsistent Yield Management in 2010 was comprised of two special campaigns. One campaign wasSSI(Super Sales Initiative): enhancement of sales capability based on customer first philosophy. The otherwas TCR(Total Cost Reduction): active cost management including minimization of unnecessary cost andadoption of efficient processes. We believe a handsome outcome emerged from the synergy of the SSI andTCR campaigns.

Revenue Volume Fleet

Head of Liner UnitSeock-Dong Lee






05. Appendix

21+

22H

MM

What is HMM’s business strategy in 2011?

For sustainable growth, we define the year 2011 as a “Bridging Year”. By improving workingprocesses and diversifying our service portfolio, we will pursue both stability and profitability.

The market fundamentals this year also looks unfavorable to carriers. Various risk factors of the globaleconomic recovery still threaten consumers’ buying power; over-supply issues still challenge freight ratestability; and the bunker price hike is adding pressure on the cost structure. Even in the current unfavorablecircumstances, we are planning an annual performance which will come close to that of last year. We willreach our goal by concentrating on the sales initiative; enhancing service quality through expanding theservice horizon; and improving reliability. On the other hand, we will improve working processes andorganization to bring out increased efficiency.

New value chain, New working process For sustainable growth, we define the year 2011 as a “Bridging Year”. As fleet capacity increased a lot andfurther capacity will be delivered in 2012, other supporting functions should be balanced with it for the bestuse of fleet capacity. We’ll re-organize our value chain with improved systems, trimming all service loops,expanding sales capability and enhancing relationships with cargo owners. In short, we will prepare ourcompetence to balance out fleet growth for the future growth.

Expand service horizonHMM will open new loop on the US East Coast, Trans Atlantic Service and enhance existing services in theMediterranean, the Middle East and India. At the same time, we believe this is good timing to enter themarkets. We formed the “Emerging Trade Management Team” this year to deal with emerging marketsincluding South America, Africa, Australia and Russia. At last, we can provide an improved, more diversifiedservice to meet customers’ needs. In 2011, we will expand all our efforts to achieve quantitative growth and quality growth at the same time. Itwill be a starting point to new growth in the future.

Supply & Demand

(Source : Alphaliner, Drewry, Clarkson)

Bulk Unit

HMM INSIDE 2010

Wet Bulk Introduction

Tanker ServiceThe Tanker Service has been at the centerof HMM’s growth over the past few years,and the company aims to maintain itsleading role. HMM’s Tanker Service isorganized in 2 teams: Crude Tanker Teamand Product Tanker Team. Its fleet consistsof 18 crude tankers, 10 product tankersand 4 chemical tankers.

Currently, around 64% of the crude tanker fleet has long-term contract commitments, while the remainderoperates in the spot market. Each sector - even each individual vessel - has different primary businessroutes. VLCC tankers engaged in long-term contracts with domestic and foreign companies ship crude oilfrom the Middle East to the Far East; whilst VLCCs committed to the spot market operate from the MiddleEast or West Africa to destinations either in the Far East or the West. Smaller vessels, such as MRs andchemicals, usually operate on short-haul trips between Southeast Asia and the Far East.

Fleet expansion necessitated that new staff were posted to both London and Singapore in 2005. TheLondon office is currently responsible for the Suezmax and MR business, while the chemical tankerbusiness is managed by the Singapore office.

Gas Carrier ServiceHMM’s LNG Carrier Service was launched in 1994 as the first Korean LNG carrier. Since the first Koreanflagged vessel “Hyundai Utopia” transported LNG cargoes from Indonesia to Korea, HMM has become thelargest LNG carrier in Korea. With KOGAS(Korea Gas Corporation), HMM has established a 20~25 yearlong-term contract: currently its nine vessels (one on charter) convey KOGAS cargoes on diversified routesbetween Korea, Indonesia, Malaysia, Qatar, Oman and Yemen. In 2010, HMM carried 7.5 million tons ofLNG, which is approximately 24% of the total 32 million tons of domestic imports.

HMM also won the bid for KOGAS’ Joint VentureCompany Project, starting in mid-2009, in which the totaltransportation reaches 3.5 million tons of LNG annuallyfrom Sakhalin and Yemen to Korea. HMM acquired an18% ownership stake in four new LNG vessels, one ofwhich will perform a 20 year-contract on the Yemen -Korea route.

The LPG Carrier Service was launched in January 2006 with the long-term chartered VLGC, “DL Calla” andhas provided a high quality service based on spot trading and t/c out. HMM plans to operate a total of 3vessels (VLGC) in 2011 and will expand the fleet continuously in the future, depending on market demand.We are ready to give the best service to a wide range of customers around the world.






05. Appendix

23+

24H

MM

Wet Bulk Interview

What are the main reasons for Wet Bulk Sector’s positiveperformance despite a bearish market in 2010?

Minimization of spot exposure in Crude Tanker Service through accurate market forecastingalong with LNG Service’s stable earnings, which are based on 100% long-term contracts, led tosound figures for two consecutive years.

Approximately 90% of the Wet Bulk Sector revenue is created from Crude tanker and LNG services, whiletheir stable profit structure is the main source of Wet Bulk Sector’s positive result in 2010 following theprevious year.

When the market was full of positive outlook during 2007-2008 made by various research institutions andanalysts, HMM, in contrast, predicted an unfavorable market after 2008. Through such strategic decisionsbased on distinguished predictive capability, HMM was able to sustain sound figures unlike peer companiesin the industry.

HMM had initially forecasted bullish and bearish markets in the first and second half respectively, when S/Hbanning was actually conducted faster than expected centering on China, Taiwan, and Thailand etc.Furthermore, along with slower deliveries, the outflow of vessels for storage purposes resulted in a supplyreduction effect which led to a better market. In the second half, however, the market plunged due to theconcentration of deliveries along with the return of storage vessels, while demand stayed within theexpected range. Nevertheless, HMM was able to expand fixed earnings in the bear market of the secondhalf through increasing long-term and charter-out contracts in advance.

HMM’s LNG Carrier Service was launched in 1994 as the first Korean LNG carrier. Since the first Koreanflagged vessel “Hyundai Utopia” transported LNG cargoes from Indonesia to Korea, HMM has become thelargest LNG carrier in Korea. With KOGAS(Korea Gas Corporation ), HMM has established a 20~25 yearlong-term contract: currently its eight vessels convey KOGAS cargoes on diversified routes between Korea,Indonesia, Malaysia, Qatar, Oman and Yemen. Such cost+margin based long-term contracts havecontributed to Wet Bulk Sector’s positive performance in spite of the slow market in 2010.

Revenue World Scale Fleet

Head of Bulk UnitYoung-Joon Lee

Bulk Unit

HMM INSIDE 2010

What is HMM’s strategy in 2011?

Strengthening risk management through expanding long-term contracts and minimizing spotexposure along with securing investment opportunities utilizing the trough of the industry cycle,aiming for HMM’s second leap forward.

2011 Crude Tanker market forecast does not seem much different from the 2010 situation in terms offundamental aspects. World oil demand is expected to increase by YoY 1.6% based on economic growthof emerging nations such as China and India, but considering the massive order book in place, supply willexceed demand which will maintain an imbalance.

Therefore, HMM’s risk management reinforcement plan will continue in 2011. First of all, establishing stableprofitability through minimizing spot exposure is the first priority and increasing COA, CVC and charter-outcontracts will be part of the first phase. HMM possesses comparative advantage over its peers driven bylow cost structure.

In the meantime, HMM is pursuing vessel investment opportunities utilizing the recent slow market. The most important factor in Wet Bulk Sector’s sound performance in the last 10 years was that HMM hadacquired vessels in the early 2000s which were delivered between 2003-2006. Moreover, HMM did notorder any new-builds or chartered in vessels during the super cycle of 2007-2008, preparing for the bearishmarket following the peak, pulling HMM to the top tier in terms of cost structure in the market. On the otherhand, due to vessel ageing and fleet reduction, additional competitive vessels are required; HMM willtherefore keep track of the market situation and prepare for the second leap through aggressive but prudentinvestment decisions.

Given the continuous strong demand for clean and efficient energy in South Korea, as well as in the world,the LNG market continues to grow faster than any other segment of the shipping industry. Under suchcircumstances, HMM will fulfill overseas LNG projects and expand service capability, whilst closelycooperating with both domestic and overseas customers.

Supply & Demand

(Source : IEA, Clarkson)






05. Appendix

25+

26H

MM

Dry Bulk Introduction

Tramper ServiceHMM Tramper Team carries a broad range of both major and minor bulkcommodities in segmented sections; consisting of Cape/Panamax,Handy/Handymax and Dedicated Tonnage teams.

The Cape/Panamax Team carries iron ore, coal, grain, coke and so forth, with owned or chartered vessels ranging from60,000 up to 200,000 DWT. Handy/Handymax transports iron ore, coal, fertilizer, cement, salt, bauxite and othermaterials, with tonnage from 20,000 up to 60,000 DWT. Both teams are keen and willing to take spot market and long-term business opportunities, either cargoes or tonnage, and are ready to expand their business scope into the Atlanticmarket while increasing their Pacific business volumes.

The Dedicated Tonnage Team executes iron ore, coal and steel product shipments with 10 ore/coal carriers and a singlesteel product carrier. These vessels have been serving KEPCO and POSCO exclusively on 15 to 20-year contracts, andfrom 2010 they also included Hyundai Steel. Based on more than 20 years of experience, HMM plans to further expandits services towards overseas clients in such areas as giant steel mills and power plants.

HMM has established its global network in the U.K., U.S., Singapore, Australia and India to assist chartering and businessdevelopment; whilst port captains all over the world support the efficient operation of vessels.

Bulk Liner ServiceFor the past 30 years, HMM’s Bulk Liner Team has provided liner services for assorted steel and wooden cargoes on 13trading routes worldwide - with capacities ranging from 10,000 to 60,000 DWT. The team offers service routes from theFar East/Southeast Asia to America/Europe/Asia/the Middle East, and pioneered HMM’s first service lines into the BlackSea/India/China regions from 2004 and South America from 2009.

With established local offices in China, the U.S., Europe and India - as well as Korea and Southeast Asia -the teamannually performs over 350 voyages and delivers 4-5 million tons of general cargoes on a range of chartered vessels.

The demands of international customers are met with highly qualified shipping knowledge and experienced cargo handling. Throughsafe vessel operation, the efforts of HMM Bulk Liner Team have always been geared towards the achievement of zero claims.

Heavy Lift & Transport ServiceBuilding on the success of various projects up to 2006, HMM launched the heavy-lift service in 2007. HMM has made fulluse of our experience to establish a substantial market share in both projects and plants in Korea, a primary hub of Asianproject activities and a primary source of project-related equipment.

We currently provide project cargo services between the Far East and the Middle East/India using modern multipurposecarriers to carry lengthy, super-heavy, and highly voluminous cargoes such as petro-chemical equipment, wind energy,power plant facilities, and so forth. To meet clients’ needs, our project service offers individually-tailored solutions using a3D solution system to consider the size and specific requirements of each cargo.

In addition to our current Far East Middle East Service, we will expand project cargo service worldwide by 2014 byextending our service line gradually to Europe and the Mediterranean Sea, the U.S, Africa, Australia.

Bulk Unit

HMM INSIDE 2010

Dry Bulk Interview

Even though the amount of loss was reduced in 2010, Dry BulkSector is still in the red. What is the reason?

HMM recorded continuous losses due to a high cost structure but has reduced the overall levelthrough redeliveries, charter renegotiations and replacements etc.

In 2010, the dry bulk market was rather bullish in terms of BDI with high volatility and the overall marketturned slow in the first and second half respectively. HMM had initially expected the average BDI of 2010 tobe in the range 2,750-2,900 and the actual figure stood at BDI 2,758. Despite the accurate marketforecast, HMM recorded losses due to high cost structure for two consecutive years. However, the amountis being reduced on a quarterly basis driven by consistent cost reduction efforts.

Cost reduction is mainly related to fuel and cargo cost but lowering vessel cost itself has the greatest impact.Those vessels that were chartered during the super cycle of 2007-2008 are the major burden and HMM hasreduced the overall cost structure through redeliveries, charter renegotiations and replacements etc.

Revenue BDI Fleet






05. Appendix

27+

28H

MM

What is HMM’s strategy in 2011?

HMM will achieve both fleet expansion through active vessel investment and cost reductionthrough high-cost vessel redeliveries and replacements etc. Furthermore, HMM will minimize spotexposure through FFA hedging and long-term contract expansion, whilst establishing newgrowth engines in the meantime through developing emerging markets and pursuing newbusiness opportunities.

In 2011, a slow market is expected due to the massive order book in place and supply is likely to exceeddemand. When the possibility of greater volatility comes from unexpected factors, keen operationalcapability is required to utilize such market fluctuations.

In 2011, HMM will make cost reduction the first priority, followed by increasing long-term contracts;minimizing spot exposure through FFA hedging; developing emerging markets; and seeking new businessopportunities that will lead to establishing a solid profit structure, free from high volatility in the dry bulkmarket.

Vessel Cost Reduction and Spot Exposure Minimization Efforts will continue to redeliver high-cost vessels; to renegotiate charters; and to acquire low-cost vessels,

following the previous year and HMM is pursuing additional investment, utilizing the trough of industrial cyclein a long-term perspective. Aggressive investment is planned with most of the vessel related CAPEX beingfocused in the Dry Bulk Division. In addition, along with securing stability through minimizing spot exposurethrough long-term contracts (COA, CVC, charter-outs), HMM will cope with volatility through riskmanagement including FFA etc and such striving for growth will prepare HMM for the future up-phasebased on reinforced strength this year.

Emerging Markets Development HMM has plans to expand the sales force in China, the biggest market in the world, along with theemerging markets of India and the Middle East etc. HMM and China's Shandong Far East Marine Group willdeliver a total of 23 million tons of iron ore, including 1.5 million tons annually from Brazil and Australia, toChina by 2025 for the Hebei Steel Group, the world's second largest steelmaker. With additional contractsin progress, HMM will expand its market presence in the Chinese transportation market, driven by an MOUagreement earlier this year with Shandong Province Communication and Transportation Corp., which willwiden logistics services in Asia's fastest growing economy. This will reinforce competitiveness in theChinese market which drives the global dry bulk market, and furthermore, Southeast Asia HQ, which hadbeen under HMM HQ’s control, will be self-supporting in terms of bulk operation; this will expedite nichemarket development of India, Australia and Vietnam etc.

Heavy Lift Business Reinforcement HMM was the nation’s first to enter the heavy cargo transportation business in 1996 and is currentlyoperating 5 heavy cargo carriers ranging from 10,000 DWT to 30,000 DWT. HMM plans to bring in 4additional vessels this year, making a fleet of nine ships for the purpose of cargo transportation. Becauseheavy lift cargoes are large-scale, expensive and sensitive, they require a high degree of skill and know-how

Bulk Unit

HMM INSIDE 2010

to transport. Therefore, HMM formed a joint venture, HD Atlas Co., Ltd., with Dongbang Transport &Logistics Co., a leading domestic heavy cargo land transporter. HMM has opened up a new era of heavy lifttransportation business by taking charge of sea transportation while land transportation of heavy andgeneral cargoes is provided by HD Atlas. HMM is currently undertaking atomic power plant transportation toUAE on behalf of KEPCO and will take further steps to be a global heavy lift transporter based ondistinguished strengths in 2011.

Bulk Terminal BusinessHMM has plans to advance into the bulk terminal business in order to develop new profitable businessopportunities and promote competitiveness through cost reduction and differentiation within previous bulktransportation services. New revenue sources will be secured through participating in the general cargoterminal development in the emerging countries of China, India and Brazil etc, along with mineral resourcesexploitation.

Supply & Demand

(Source : SSY)






05. Appendix

Overseas Organizations

29+

30H

MM

AmericaHyundai Merchant Marine (America), Inc. Hyundai America Shipping Agency, Inc. Hyundai Intermodal, Inc. Washington United Terminals, Inc.California United Terminals, Inc.

EuropeHyundai Merchant Marine (Europe), Inc. Hyundai Merchant Marine (Deutshland) GmbH Container Depot und Reparatur Hamburg GmbHHyundai Merchant Marine (Netherlands) B.V. Hyundai Merchant Marine (Belgium) N.V. Hyundai Merchant Marine (France) S.A. Hyundai Merchant Marine (Scandinavia) AB Hyundai Merchant Marine (Italy) S.R.L. Hyundai Merchant Marine (CIS) LLCHyundai Merchant Marine (Austria) GmbH

ChinaHyundai Merchant Marine (China) Co., Ltd. Hyundai Merchant Marine (China) Shanghai Co., Ltd.Hyundai Merchant Marine (China) Tianjin Co., Ltd. Hyundai Merchant Marine (China) Qingdao Co., Ltd. Hyundai Merchant Marine (China) Ningbo Co., Ltd. Hyundai Merchant Marine (China) Nanjing Co., Ltd. Hyundai Merchant Marine (China) Dalian Co., Ltd.

South-East/West AsiaHyundai Merchant Marine (Singapore) Pte. Ltd. Hyundai Merchant Marine (Thailand) Co., Ltd. Hyundai Merchant Marine (Malaysia) Sdn. Bhd. Hyundai Merchant Marine (India) Pvt. Ltd. Hyundai Merchant Marine (Vietnam) Co., Ltd. Hyundai Merchant Marine (Australia) Co., Ltd.

Hyundai Merchant Marine (Japan) Co., Ltd.Hyundai Merchant Marine (Hong Kong) Co., Ltd. Hyundai Ocean Pioneer Shipping Agency Co., Ltd. Hyundai Merchant Marine (U.A.E.) LLC.Hyundai Merchant Marine (Taiwan) Co., Ltd. Changwan Container Service Ltd.Jakarta Office

OtherInformation

03

Other Information

Other Information

tenacity

Other Information

HMM INSIDE 2010






05. Appendix

Other Information

33+ 34

HM

M


Stock listed in KRX (Seoul)

Ticker 011200.KS

Capital KRW 816,366 Million

Number of shares issued Common Stock : 143,273,229 Redeemable Preferred Stock : 10,000,000

Head office 1-7 Yeonji-Dong, Jongno-Gu Seoul, Korea

Number of HMM Employess 2036

Stock information

(Unit: KRW)

ContentsDate Purpose Type Number of shares Face amount Issuance Price

Dec 30, 2010 paid-in Common Stock 10,200,000 5,000 32,000capital increase

Paid-in Capital Increase

1976 : Company established as Asia Merchant Marine Transportation service opened with a fleet of three VLCCs

1977 : Bulk cargo tramper service and deep-sea tug service began

1981 : Specialized ore and coal transportation service began

1985 : Full container service opened between the Far East and the Western US

1994 : Korea’s first LNG transportation began with the launching of Hyundai Utopia

1995 : Listed on the Korean stock market

1998 : The New World Alliance service began with APL and MOL

2001 : Liquidity problem arose

2002 : Disposal of fleet, Car Carrier Unit & domestic terminals

2003 : Liquidity crisis was fully overcome

2004 ~ : Success leads to fleet expansion

2009 : Process Innovation for management efficiency

2010 : Turnaround faster than peers

HMM Developments

Foundation &

Setting Business Territory

(1976 ~1986)

Jump up to the

Industry Leader

(1987~2000)

Success Built on

Strong Foundation

(2004 ~ Present)

Other Information

HMM INSIDE 2010

Classification Title Name Appointed on Term (YR) Responsibility Liability

Chairwoman of BOD Jeong-Eun Hyun 19-Mar-10 3 Chairwoman of BOD Insured

Representative Director Suk-Hui Lee 19-Mar-10 2 President & CEO Insured

Inside Director Paik-Hoon Lee 27-Mar-09 3 CHO Insured

Inside Director Seong-Man Kim 19-Mar-10 2 Advisor Insured

Director Dong-Gun Kim 25-Mar-11 2 - Insured

Director Joon-Soo Jon 27-Mar-09 3 - Insured

Director Taek-Soo Han 25-Mar-11 2 - Insured

Director Yong-Kuen Cho 25-Mar-11 2 - Insured

Director Eric Sing Chi Ip 25-Mar-11 2 - Insured

HMM Governance Structure

Standing

director

Outside

director

Audit Committee

General Shareholder's Meetings

Outside DirectorNomination Committee

Board of Directors (9)Outside Directors (5)Standing Directors (4)

Stategy & FinanceCommittee

C E O

Managing Directors ofBusiness Units






05. Appendix

35+

36H

MM


Shareholders Shares %

Hyundai Elevator 33,360,168 21.8%

Hyundai Heavy Industries 25,182,381 16.4%

Hyundai Engineering & Constructions 11,877,570 7.7%

Hyundai Samho Heavy Industries 11,265,801 7.4%

Cape Fortune 8,801,838 5.7%

Nexgen Capital 7,901,503 5.2%

Others 54,883,968 35.8%

Total 153,273,229 100.0%

Major Shareholders

* Shareholders with shares above 5% based on disclosure data.

Green Management andEthics Management

04

Green Management

Ethics Management

Green Management and Ethics Management

tog

etherness

Green Management andEthics Management

Let`s Green the World

HMM maintains an eco-friendly policy to preserve the environment, and adheres to the principle of pursuingenvironmentally sound and sustainable development.Internally, HMM s environmental management system (ESQS) integrates requirements of internationalstandards such as ISO 14001:2004, ISO 9001:2000, OHSAS 18001:2007 and the ISM code to provideenvironmental protection, safety and the highest quality of service for marine transportation.

To create Green Growth that is environmentally sound and sustainable, HMM is identifying and accuratelymanaging sites of GHG(greenhouse gas) discharge, minimizing emission of pollutants through activeinvestment in eco-friendly technology, reinforcing partnership among stakeholders through foreign activitiesto engage in maintaining sustainability of Green Management.

HMM INSIDE 2010






05. Appendix

Green Management

39+

40H

MM

GHG inventory establishmentGHG management system that calculates and categorizes GHG displacement generated from each source.

Eco-friendly technology developmentHull resistance reduction : Application of fuel-friendly paint, hull cleaning, propeller polishingPropulsion efficiency improvement : PBCF(Propeller Boss Cap with Fin), Mewis Duct, Twisted Leading EdgeRudderEngine efficiency improvement : Fuel homogenization device, VID(Variable Ignition Distributor), M/E slide valveOperation control improvement : EOCS(Energy Consumption Optimization System), tanker super slowsteaming, energy-saving operation, and technical guideline provision.L.O consumption improvement : ALPHA Lubricator installation, application of main engine s cylinder oil feedrate optimized equipment Equipment supplementation : M/E T/C CUT-OFF equipment installation.

Coordination with foreign institutions Annual submission of report on Carbon Information Release Project intended for financial investors. Discussion of marine environment-related issues through agenda submission to IMO Marine EnvironmentProtection Committee. Discussion of eco-friendly policy through WS(World Shipping Council) participationPromotion of eco-friendly maritime transportation through BSR-CCWG(Clean Cargo Working Group)participation.

GHG reduction targetReduction target : -17.0% by 2015 compared with 2008 Unit average emission by vessel

Future plansHMM has plans to minimize pollutants through consistent verification of fuel-reduction facilities and utilizeresources/energy efficiently through introducing a Green Management System; Consistent verification and expansion of fuel-reduction facilities. Increase in efficiency in terms of GHG and resources/energy utilization through Green Management Systemintroduction.

Ethics Management

HMM INSIDE 2010

At HMM, ethics management constitutes a core management philosophy as it strives to grow into a blue-chip company realizing sustainable development. It will try to earn the trust of all stakeholders, assumevarious social responsibilities and contribute to the prosperity of mankind as well as Korea.

In February 2007, the Ethics Management Team was established. Until today, the importance of socialresponsibility and ethics management was limited to the cognitive stage, but centering around the team, it isnow HMM s strong desire to practice systematic and consistent ethics management and CSR in the future.

In August 2007, HMM had proclaimed the Code of Ethics and employees share and pledge such spirit inthe Code of Ethics Pledge Ceremony every year. The culture of ethics management is being promoted viaNews letter , Online education and various campaigns including management consultation to enhance

the ethics of employees. Furthermore, HMM possesses a system, available on the homepage, throughwhich customers and corporations can report actions that violate the code of ethics.

Trust Managementfor Shareholders and Customers

HMM Ethics Management

Ethics Managementfor/by Employees

Responsible Managementfor Country and Society

Transparent Managementfor Partners and Competitors






05. Appendix

41+

42H

MM

Meanwhile, various social activities are constantly being continued in order to grow together with theregional communities and to practice CSR within the industry that the company lies, based on respect forman s life and win-win philosophy. CSR activities are comprised of categories that include socialresponsibility business/social volunteering/culture and environments etc, to reflect HMM s characteristicsthrough diverse events. For voluntary participation of employees and acquisition of sustainability, HMM istruly seeking for a win-win path forward that will last for a long time.

1. We base the company's management principles on the highest ethical standards, and create an excellent working

environment for all employees.

2. We deliver what we promise, and take pride in meeting targets and expectations. We create customer confidence

through relevant and timely communications.

3. HMM is a well established business, accountable to all its shareholders and investors. We maximize company value

through business innovation and growth, and operate in a transparent, responsible manner.

4. We offer fair opportunities to all our business partners, build confidence and encourage cooperation, and plan for

mutual development.

5. We uphold open and lawful competition in all our markets and comply fully with all competition and antitrust laws. We protect the environment as good corporate citizens and contribute to the development of local and international communities.

Code of EthicsHMM is a global community of aligned, dedicated, highly motivated people delivering the best possiblevalue to customers through operational excellence. Hence, HMM's core values are a standard of ourprinciples of excellence.

05Appendix



02. Divisional Information



05. Appendix

Independent Auditors’ Report

Non-Consolidated Statements of Financial Position

Non-Consolidated Statements of Income

Non-Consolidated Statements of Cash Flows

Appendix

Appendix

HMM INSIDE 2010






05. Appendix

Independent Auditors’ Report

45+

46H

MM

English Translation of a Report Originally Issued in Korean

To the Shareholders and the Board of Directors of Hyundai Merchant Marine Co., Ltd.

We have audited the accompanying non-consolidated statements of financial position of Hyundai Merchant Marine Co., Ltd.(the “Company”) as of December 31, 2010 and 2009, and the related non-consolidated statements of operations,appropriation of retained earnings, changes in shareholders’ equity and cash flows for the years then ended, all expressed inKorean won. These financial statements are the responsibility of the Company’s management. Our responsibility is to expressan opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the Republic of Korea. Those standardsrequire that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free ofmaterial misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in thefinancial statements. An audit also includes assessing the accounting principles used and significant estimates made bymanagement, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonablebasis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of theCompany as of December 31, 2010 and 2009, and the results of its operations, changes in its retained earnings and itsshareholders’ equity, and its cash flows for the years then ended, in conformity with accounting principles generally accepted inthe Republic of Korea.

Accounting principles and auditing standards and their application in practice vary among countries. The accompanyingfinancial statements are not intended to present the financial position, results of operations, changes in shareholders’ equityand cash flows in accordance with accounting principles and practices generally accepted in countries other than the Republicof Korea. In addition, the procedures and practices utilized in the Republic of Korea to audit such financial statements maydiffer from those generally accepted and applied in other countries. Accordingly, this report and the accompanying financialstatements are for use by those knowledgeable about Korean accounting procedures and auditing standards and theirapplication in practice.

March 17, 2011

Deloitte Anjin LLC14Fl., Hanwha Securities Bldg.,23-5 Yoido-dong,Youngdeungpo-gu, Seoul150-717, KoreaTel: +82 (2) 6676 1000Fax: +82 (2) 6674 2114www.deloitteanjin.co.kr

Notice to ReadersThis report is effective as of March 17, 2011, the auditors' report date. Certain subsequent events or circumstances may have occurred between the auditors'report date and the time the auditors' report is read. Such events or circumstances could significantly affect the accompanying financial statements and mayresult in modifications to the auditors°Ø report.

Non-Consolidated Statements of Financial PositionAS OF DECEMBER 31, 2010 AND 2009

HMM INSIDE 2010

(Unit: 1,000 Korean Won)

2010 2009

ASSETS

CURRENT ASSETS:

Cash and cash equivalents 1,171,616,100 771,484,820

Short-term financial instruments 10,722,750 270,944,000

Short-term investment securities 10,442,734 -

Trade receivables, net of allowance for doubtful accounts of

14,136,221 in 2010 and 8,626,011 in 2010 522,501,431 489,873,565

Non-trade receivables, net of allowance for doubtful accounts of

6,541,354 in 2010 and 3,691,358 in 2010 141,634,037 9,267,861

Short-term loans, net 3,725,777 1,300,544

Inventories 267,509,739 209,076,246

Derivatives assets 195,059 4,458,790

Income tax refundable 5,030,709 7,850,403

Other current assets 385,138,724 120,338,837

Total current assets 2,518,517,061 1,884,595,066

NON-CURRENT ASSETS:

Long-term financial instruments 364,427 288,000

long-term loans, net 16,100,000 -

Long-term investment securities 381,180,846 402,434,655

Investment securities accounted for using the equity method 901,836,001 836,464,788

Property, vessels and equipment, net 4,907,606,019 5,169,613,678

Intangible assets, net of accumulated amortization 26,612,811 9,147,164

Derivatives assets - -

Other non-current assets 65,580,283 38,369,928

Total non-current assets 6,299,280,387 6,456,318,213

Total assets 8,817,797,448 8,340,913,279






05. Appendix

47+

48H

MM


2010 2009

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Trade payables 448,175,487 533,320,301

Short-term borrowings 70,199 75,984,728

Accrued expenses 30,559,428 37,918,757

Derivatives liabilities 3,244,792 408,201

Income tax payable - -

Current portion of debentures 583,979,754 219,334,562

Current portion of long-term debts 358,874,245 409,947,276

Other current liabilities 51,792,407 10,184,954

Total current liabilities 1,476,696,312 1,287,098,779

NON-CURRENT LIABILITIES:

Debentures 1,768,341,844 1,696,578,200

Long-term borrowings, net of current portion 207,222,800 495,113,343

Long-term non-trade payables 2,389,242,734 2,626,192,127

Accrued severance benefits, net 20,757,784 18,100,982

Derivatives liabilities 4,369,666 3,689,464

Total non-current liabilities 4,389,934,828 4,839,674,116

Total liabilities 5,866,631,140 6,126,772,895

SHAREHOLDERS’ EQUITY:

Capital stock 816,366,145 765,366,145

Capital surplus 1,278,313,647 855,652,838

Capital adjustments -66,670,482 -203,014,155

Accumulated other comprehensive income 468,092,504 517,015,043

Retained earnings 455,064,494 279,120,513

Total shareholders’ equity 2,951,166,308 2,214,140,384

Total liabilities and shareholders’ equity 8,817,797,448 8,340,913,279

Non-Consolidated Statements of IncomeFOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

HMM INSIDE 2010


2010 2009

SALES 8,086,981,439 6,115,482,074

COST OF SALES 7,323,626,529 6,560,817,702

GROSS PROFIT (LOSS) 763,354,910 -445,335,628

SELLING AND ADMINISTRATIVE EXPENSES 161,620,019 120,015,726

OPERATING INCOME (LOSS) 601,734,891 -565,351,354

NON-OPERATING INCOME (EXPENSES)

Interest income 35,155,060 30,230,264

Interest expense -276,722,659 -235,918,916

Gain (loss) on foreign currency transactions, net 37,768,182 45,334,064

Gain (loss) on foreign currency translation, net -64,623,950 -159,228,430

Gain (loss) on valuation of derivatives, net -8,358,044 10,147,530

Gain on transaction of derivatives, net -540,952 10,052,975

Dividends income 10,881,375 9,847,066

Loss on disposal of short-term investment securities, net -856,148 -43,685

Loss on valuation of short-term investment securities, net 504,238 -

Equity in net income of investees using the equity method, net 62,082,955 21,374,109

Gain on disposal of long-term investment securities, net - 3,200,367

Gain (loss) on disposal of property, vessels and equipment, net -27,302,798 285,150

Gain on prior period error correction - 56,460,901

Other, net -22,622,718 -24,580,827

-254,635,459 -232,839,432

INCOME (LOSS) BEFORE INCOME TAX 347,099,432 -798,190,786

INCOME TAX EXPENSE (BENEFITS) -89,976,488 3,626,282

NET INCOME (LOSS) 437,075,920 -801,817,068

EARNINGS (LOSS) PER COMMON SHARE

Basic earnings (loss) per common share 3,319 -6,256

Diluted earnings (loss) per common share 3,319 -6,256






05. Appendix

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009


49+

50H

MM


2010 2009

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income (loss) 437,075,920 -801,817,068

Adjustments to reconcile net income (loss) to net cash provided

by (used in) operating activities:

Depreciation 302,089,270 324,592,642

Amortization of intangibles 3,757,906 1,045,806

Provision for severance benefits 15,237,930 14,707,077

Interest expenses 127,724,733 140,777,426

Loss (gain) on foreign currency translation, net 52,403,475 187,360,154

Loss (gain) on transaction of derivatives, net 540,952 -10,052,975

Gain on valuation of derivatives, net 8,358,044 -10,147,530

Loss (gain) on disposal of property, vessels and equipment, net 27,302,798 -285,150

Loss on disposal of short-term investment securities, net - 43,685

Loss on valuation of short-term investment securities, net -504,238 -

Loss on disposal of investment securities accounted for using 856,148 -

the equity method, net

Equity in net income of investees using the equity method, net -62,082,955 -21,374,109

Gain on disposal of long-term investment securities, net -3,200,367

Loss on valuation of short-term investment securities, net - -

Effect of translation into functional currency -50,798,991 -

Others, net -80,732,697 -

Bad debts expense 8,322,236 11,227

352,474,609 535,070,559

Changes in assets and liabilities resulting from operations:

Decrease (increase) in trade receivables -44,640,379 94,847,910

Decrease in non-trade receivables -63,630,428 17,968,925

Decrease (increase) in inventories -58,608,030 -88,696,007

Decrease (increase) in other current assets -312,667,123 7,462,347

Increase (decrease) in trade payables -48,044,475 78,654,174

Increase (decrease) in non-trade payables 30,214,641 1,326,125

Increase (decrease) in other current liabilities -4,369,133 15,696,088

Payment of severance benefits -12,875,355 -22,759,122

Decrease in income tax payable - -5,835,264

Others 294,229 14,487,005

-514,326,053 113,152,181

Net cash provided by (used in) operating activities 275,224,476 -153,594,328


HMM INSIDE 2010


2010 2009

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from disposal of short-term financial instruments 260,221,250 2,613,788,358

Proceeds from disposal of trading securities - 11,133,607

Proceeds from disposal of long-term investment securities 43,000,000 4,622,965

Proceeds from disposal of property, vessels and equipment 69,376,018 2,324,573

Decrease in other assets 37,330,951 51,424,159

Proceeds from investment securities accounted for using the equity method 209,000,878 -

Purchase of short-term financial instruments - -2,330,177,290

Purchase of long-term financial instruments -76,427 -

Acquisition of short-term investment securities -10,001,326 -

Acquisition of long-term investment securities -6,266,464 -44,892,744

Acquisition of investment securities accounted for using the equity method -38,598,177 -50,733,214

Acquisition of property, vessels and equipment -170,745,444 -320,770,812

Acquisition of intangibles -2,290,473 -1,169,625

Increase in other assets -27,503,182 -12,245,184

Net cash used in investing activities 363,447,604 -76,695,207

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term borrowings 326,196,699 85,959,728

Proceeds from debentures 1,107,223,700 1,153,614,062

Proceeds from long-term borrowings 237,087,910 413,855,000

Paid in capital increase 326,007,039 -

Proceeds from disposal of treasury stock 128,457,897 149,504,994

Repayment from short term borrowings -402,111,228 -

Repayment of current portion of long-term debts -111,793,387 -705,375,252

Repayment of current portion of long-term debentures -686,982,900 -220,000,000

Repayment from long term borrowings -436,205,490 -

Payment of cash dividends -77,151,938 -75,014,215

Convertible preferred stock -183,980,000 -

Acquisition of treasury stock -48,158,519 -16,959,616

Decrease in other liabilities -417,130,584 -3,429,153

Net cash provided by (used in) financing activities -238,540,800 782,155,548

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 400,131,280 551,866,013

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 771,484,820 219,618,807

CASH AND CASH EQUIVALENTS, END OF YEAR 1,171,616,100 771,484,820

HYUNDAI MERCHANT MARINE

Hyundai Merchant Marine Co.,Ltd. Hyundai Group Building, 1-7 Yeonji-Dong, Jongno-Gu, Seoul 110-754, Korea

TEL. 02-3706-5114 FAX. 02-734-8496www.hmm21.com

Date post:	09-Jul-2020
Category:	Documents
Upload:	others
View:	0 times
Download:	0 times

HMM INSIDE · Group, the world's second largest steelmaker, HMM will expand market presence and...

Documents