HMM reports $8M net income in 2022, halving in Q4 Seafarers News

South Korea’s largest shipping company, Hyundai Merchant Marine HMM, grew its consolidated net profit by 89% to KRW10.1 trillion (US$7.9 billion) in 2022 but saw an above-average decline in container revenue in the fourth quarter. In other words, HMM reports $8 million in net income in 2022, which translates to a halving in Q4, says Alphaliner.

Operating revenue from container activities reached KRW 1.2 trillion (US$975 million) in the last three months of the year, less than half the KRW 2.6 trillion recorded in the previous quarter.

It was the third consecutive quarterly decline in container profit for the line. Average profit fell to $1,620 per TEU from $2,862 in the third quarter, while container operating margin was 39% in the fourth quarter, the lowest since late 2020.
Despite the favorable conditions, HMM recorded a 12.2% increase in freight rates for the year as a whole, driven by more long-term contract business, although volumes were down 3.5%.

The Seoul-based line will continue with its previously announced strategy of expanding contract business and entering niche markets, including more refrigerated stores. HMM said it expects the future direction of the market to be determined by ship supply as world trade recovers and environmental regulations come into effect.

Falling profits could put renewed pressure on the state to privatize HMM. The largest shareholder, the state-owned Korea Development Bank, was said to be in talks with potential buyers later in the year, but no further developments were announced. As of December 31, Korea Development Bank held 20.7% of the shares, Korea Maritime Promotion Corporation 19.9% ​​and Credit Guarantee Fund 5.0%. It was reported that HMM could use some of its pandemic cash to buy back government bonds which, if converted into shares, would give the state ownership of almost 75% of the shares.

Source: Alphaliner

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