HMM Q1 Sales Halved This Year... Operating Profit Down 90%

Sales of 2.08 trillion KRW, Operating Profit of 306.9 billion KRW, Net Profit of 285.3 billion KRW
58%, 90%, 91% Decrease Compared to Same Period Last Year
"Due to Normalization of Freight Rates to Pre-COVID-19 Levels"

HMM announced on the 15th that it recorded sales of 2.0816 trillion KRW, an operating profit of 306.9 billion KRW, and a net profit of 285.3 billion KRW in the first quarter of this year. These figures represent decreases of 58%, 90%, and 91%, respectively, compared to the same period last year. The company explained that the main reason is the normalization of shipping market freight rates to pre-COVID-19 levels.

The company's sales in the first quarter of last year were 4.9187 trillion KRW. Operating profit was 3.1486 trillion KRW, and net profit was 3.1317 trillion KRW.

Regarding this performance, HMM stated, "The Shanghai Containerized Freight Index (SCFI), which averaged 4851 points in the first quarter of last year, fell to an average of 969 points in the first quarter of this year," adding, "With the resolution of the COVID-19 pandemic issue, freight rates have normalized to levels before the pandemic."

It also announced that through efforts to improve cost structure such as route rationalization and cargo cost reduction, both the container and bulk sectors achieved operating profits. The operating profit margin also recorded a favorable 14.7%, better than pre-COVID-19 levels.

The company gave a somewhat bleak forecast for this year's performance. This is because consumption weakened by the burden of energy prices following Russia's invasion of Ukraine has not recovered. Additionally, demand is expected to remain weak due to interest rate hikes and fiscal tightening policies in various countries.

The company plans to maintain competitiveness through increased operational efficiency and cost reduction. It also intends to continuously strengthen its ESG management system, including investments to prepare for eco-friendly regulations, differentiated shipping services, and IT system improvements.