HMM Posts Operating Profit of 269.1 Billion Won in Q1, Maintaining Profitability Resilience

[Financial News] HMM announced on the 13th that on a consolidated basis, it posted sales of 2.7187 trillion won and operating profit of 269.1 billion won in the first quarter of this year. Sales fell by 136 billion won, or 4.8%, from a year earlier, while operating profit dropped by 344.8 billion won, or 56.2%.
In the first quarter of last year, HMM recorded sales of 2.8547 trillion won and operating profit of 613.9 billion won.
The slowdown in first-quarter results was driven by lower container freight rates. The Shanghai Containerized Freight Index (SCFI) fell 14% to an average of 1,507 points in the first quarter of this year from 1,762 points in the same period last year. HMM's main routes to the United States also remained weak. Freight rates on the West Coast fell 38%, while East Coast rates dropped 37%.
Seasonal off-peak demand also weighed on performance. The first quarter is typically a period when demand for major container cargo, centered on consumer goods, is relatively weak. In addition, profitability came under pressure as revenue losses from the prolonged Middle East situation and higher fuel costs were added to the mix.
Based on Singapore Fuel Oil 380 CST, oil prices rose 9% to an average of $530 per ton in the first quarter of this year from $486 per ton in the same period last year. The shipping industry as a whole is also facing heavier fuel cost burdens due to recent risks stemming from the Middle East.
Still, the company maintained its profitability resilience. HMM's operating margin for the first quarter was 9.9%, which remains among the top tier of global shipping lines. The result was also broadly in line with market expectations, as securities firms had estimated HMM's first-quarter operating profit at between 257 billion won and 268 billion won.
The industry outlook is expected to remain challenging. As the global shipping market sees supply increase with the delivery of new container vessels, uncertainty is likely to widen due to higher costs linked to the Middle East situation and U.S. tariff policies.
In the container segment, HMM plans to optimize fuel costs in preparation for prolonged high oil prices and, based on its hub-and-spoke strategy, open new routes to Africa and secure demand in Southeast Asia. In the bulk segment, it aims to improve profitability through the strategic operation of Ultra Large Crude Oil Carriers (ULCCs) and continue securing long-term contracts for strategic cargo at home and abroad.


[email protected] Kang Gu-gui Reporter