Smooth Sailing for HMM... 1Q Operating Profit 407 Billion Won, Up 33% YoY

Net Profit Approaches 500 Billion Won... 63% Increase Compared to Previous Year

[Image source=Yonhap News]

HMM started the year with solid performance, posting a net profit approaching 500 billion KRW in the first quarter. This is attributed to the rise in freight rates and a strengthened focus on profitability-driven operations.

On the 14th, HMM announced that it recorded consolidated sales of 2.3299 trillion KRW and an operating profit of 407 billion KRW in the first quarter of this year. Compared to the same period last year, sales increased by 12% and operating profit by 33%. Net profit rose by 63% during the same period, reaching 485.1 billion KRW.

The Shanghai Containerized Freight Index (SCFI), which averaged 969 points in the first quarter last year, rose to an average of 2010 points in the first quarter this year. The freight index increased due to geopolitical issues in the Middle East, including the Red Sea, emerging since the end of last year. HMM explained that it achieved strong results by strengthening profitability-focused operations amid these circumstances.

With this, HMM has maintained a quarterly profit for 16 consecutive quarters. Its operating profit margin was also 17.5%, ranking among the top global shipping companies.

HMM expects major economic indicators to remain favorable due to stable consumer demand driven by the US economic recovery, increased e-commerce volume from China, and easing inflation, but warned that market conditions could change rapidly due to geopolitical risks. The prolonged Red Sea issue has led to continued rerouting around the Cape of Good Hope, causing schedule delays and increased transit times, resulting in high freight rate volatility.

An HMM official stated, "We have been receiving 12 ultra-large container ships of 13,000 TEU ordered in 2021 sequentially since January this year, and plan to deploy all of them on the trans-Pacific route by the end of this year." He added, "Based on our mid- to long-term plans, we will prepare for rapidly changing market conditions through the deployment of ultra-large vessels, strengthening eco-friendly competitiveness, digital transformation, and profitability-focused operations including cost reduction."