HMM Achieves Record High Performance Last Year... Operating Profit Margin at 53.5%

"Riding the Wave of the Shipping Boom in the First Half of the Year"

[Asia Economy Reporter Oh Gyumin] HMM, the largest container shipping company in Korea, recorded its highest performance last year, supported by the shipping boom in the first half of the year.

On the 13th, HMM announced that its operating profit last year increased by 35% compared to the previous year, reaching 9.9455 trillion KRW. Revenue rose 35% to 18.5868 trillion KRW. Net profit for the period increased by 89% to 10.0662 trillion KRW. This is the highest annual performance since its establishment in 1976, with an operating profit margin of 53.5%. The debt ratio also decreased to 26%.

HMM explained that the continuation of COVID-19 and congestion at U.S. ports until the first half of last year led to ▲high freight rates across all routes ▲improvements in freight cost and structure due to securing its own vessels and deploying ultra-large vessels, which contributed to the record performance.

However, from the second half of last year, due to demand slowdown and supply normalization, freight rates on all routes, including Asia-US routes, fell sharply, and a performance slowdown is expected. It also forecasted that consumer sentiment contraction caused by global economic recession factors such as inflation and high interest rates would affect demand.

In fact, the Shanghai Containerized Freight Index (SCFI), a comprehensive container freight rate index, dropped from an average of 5,067 points in January last year to 1,129 points in December of the same year.

In July last year, HMM announced a mid- to long-term investment strategy and plans to respond to the performance decline by building a future growth foundation in container and bulk sectors. The company also stated that it will maintain competitiveness through securing high-quality shippers, increasing operational efficiency, and cost reduction efforts.