HMM's net profit surges almost 2,000 percent as shipping fees soar

HMM's net profit surged 1,932.8 percent on year to 3.13 trillion won ($2.4 billion) in the first quarter, beating market expectations as shipping fees soared.

HMM's container vessel ships cargo abroad. [HMM]

HMM’s net profit surged 1,932.8 percent on year to 3.13 trillion won ($2.4 billion) in the first quarter, beating market expectations as shipping fees soared.

The figure was higher than FnGuide’s market consensus of 2.49 trillion won.

It logged revenue of 4.92 trillion won, up 102.6 percent on year. Operating profit jumped 208.9 percent to 3.15 trillion won. Both exceeded market expectations and are record high figures.

HMM said its profit and revenue soared as freight charges rose for most of the routes it ships to, especially those connecting the United States and Europe.

The Shanghai Containerized Freight Index, which indicates sea freight rates of cargo shipments, rose 74.5 percent on year to an average 4,851 points in the first quarter.

The company added four container vessels compared to the previous year, giving it an additional 74,799 twenty-foot equivalent unit (TEU) capacity that helped it ship more cargo during times of high shipping fees.

HMM said growth for its container shipping business could slightly slowdown in the second quarter as transportation of goods such as furniture, cars and home appliances drop. However, it plans to keep up by getting more deals to ship frozen cargo on its Europe-bound routes.

Uncertainty caused by the Shanghai lockdown and Russia’s invasion of Ukraine could affect the company as well, but said it will try to improve profitability by acquiring more orders from big companies.

HMM signed shipbuilding contracts with Daewoo Shipbuilding and Marine Engineering and Hyundai Heavy Industries to receive 12 13,000 TEU container vessels by the first half of 2024. The company expects the addition to its fleet to allow it to ship more cargo and increase profits in the future.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]