Korean shipping giant HMM suffers 95% fall in Q2 OP

HMM Co.’s Algeciras, the world’s largest container ship . [Courtesy of HMM]

HMM Co., South Korea’s largest shipping company, saw its second-quarter operating profit plunge by 95 percent from a year ago, casting a shadow over its sale.

HMM announced Thursday that it posted 160.2 billion won ($121.5 million) in operating profit for the April-June period, down 95 percent from the same period a year ago, on sales of 2.13 trillion won, down 58 percent.

The weak performance is blamed at a decline in freight rates, although some experts do not see the rate decline as an indication of a market downturn, viewing it only as a slight drop compared to the rates during the pandemic.

Analysts noted that HMM has been involved in efforts to improve its soundness since 2020, which acts as a favorable factor for stronger performance in the road ahead.

Since 2020, HMM has introduced larger vessels, including 12 vessels of 24,000 twenty-foot equivalent units (TEUs) and 8 vessels of 16,000 TEUs. Vessels with a volume of 10,000 TEUs and above are considered ultra-large vessels, which allow for cost savings and higher profitability compared to smaller ships.