HMM sales decline leads to measures to combat economic downturn Ship’s crew

South Korean shipping company Hyundai Merchant Marine (HMM) has announced plans to control costs as it reports a sharp decline in its financial performance for the first quarter of 2023.

The company posted an impressive 58% drop in sales, falling to KRW 2,082 billion (US$1.5 billion) from KRW 4,919 billion in the same period last year. That sharp drop in revenue was accompanied by a 90% drop in operating profit, which fell to KRW 307 billion (US$230 million) from KRW 3,149 billion. Net profit also saw a significant decline, falling to KRW 285 billion (US$213 million) from KRW 3,132 billion.

The softening in HMM’s financials can be attributed to a number of factors, with the main one being the easing of pressure in the global supply chain. The normalization of the container shipping market had a negative impact on HMM’s sales and profits. This was reflected in the Shanghai Containerized Freight Index (SCFI), which saw a significant decline from 4,851 points in Q1 2022 to an average of 969 points in Q1 2023.

Despite the challenges, HMM managed to turn a profit from its container and bulk businesses, albeit at lower freight rates.

In response to the prevailing economic downturn, HMM raised concerns about high inflationary pressures due to rising energy and commodity costs. These factors have led to higher interest rates and a drop in demand. “This downward trend in the global economy is expected to continue without any encouraging signs of a recovery in consumer confidence in the near term,” HMM said.

To address these challenges, HMM is committed to implementing a wide range of cost reduction measures and increasing operational efficiencies to remain competitive despite market volatility and widespread uncertainties.

HMM also continues to emphasize its commitment to an ESG (Environmental, Social and Governance) oriented approach. The company wants to strengthen its environmental competence through continuous investments and the development of the most modern IT infrastructure.

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