HMM 2Q Operating Profit 160.2 Billion KRW... 94% Decrease YoY

Sales of 2.13 Trillion KRW, a 58% Decrease Compared to the Previous Year

HMM announced on the 10th that it recorded sales of 2.13 trillion KRW and an operating profit of 160.2 billion KRW in the second quarter. These figures represent decreases of 94% and 58%, respectively, compared to the same period last year. Net profit also fell 89% year-on-year to 312.8 billion KRW.

The company's sales for the first half of this year amounted to 4.2115 trillion KRW, with an operating profit of 466.6 billion KRW. Net profit was 610.3 billion KRW. The net profit margin stood at 14.5%, the highest level among global shipping companies. The operating profit margin was 11.1%, higher than the average operating profit margin of 3.6% for KOSPI-listed companies in the first quarter.

The company attributed these results to the normalization of global shipping market freight rates to pre-COVID-19 levels starting this year, following the resolution of the COVID-19 pandemic issue. Despite ongoing challenges such as global economic recession and freight rate declines, it self-assessed that it achieved a high level of profitability by improving its business structure through the deployment of eco-friendly vessels and ultra-large ships.

HMM 2023 First Half Performance
[Photo by HMM]

Compared to 2019, before COVID-19, this year's performance has also significantly improved. In the case of HMM's main service, the trans-Pacific (West Coast) route, although the freight rate in the first half of this year (1346) was lower than that in the first half of 2019 (1610), performance improved substantially. The debt ratio also slightly improved to 24% as of the end of June, compared to 26% at the end of December last year.

Regarding the outlook and plans for the second half of this year, the company stated that it will focus on business diversification and generating new revenue streams. In the container segment, it expects no drastic supply changes due to persistent uncertainty in the U.S. economy and delayed recovery in consumer market demand. It plans to build a transportation service network aligned with changes in supply and demand by route and region, including rationalizing services linked to market conditions and opening new routes (FIM routes).

In the bulk segment, stable vessel supply is expected, and due to increased demand in the winter season, crude oil demand is anticipated to rise after the fourth quarter.

HMM stated, “We will continue to maintain world-class competitiveness by enhancing operational efficiency and refining cost reduction measures such as unit transportation costs. We also plan to strengthen our ESG management system continuously by investing in preparation for environmental regulations, which are the top concern in the global shipping industry, as well as differentiated shipping services and IT system improvements, to lay the foundation for future growth.”

This content was produced with the assistance of AI translation services.