HMM’s Q2 net spikes on higher freight rates

HMM Co., South Korea’s leading container shipper, said Wednesday its second-quarter earnings shot up nearly 14 times from a year earlier thanks mainly to rising freight rates.

Consolidated net profit came to 2.93 trillion won (US$2.24 billion) in the April-June period, up 1,290 percent from a year earlier, the company said in a regulatory filing.

Sales climbed 73 percent on-year to 5.03 trillion won, with operating profit surging 111 percent to 2.94 trillion won.

The second-quarter top line was higher than the previous quarter’s 4.92 trillion won, but its operating profit was down from 3.15 trillion won three months earlier.

In the first half of the year, the bottom line surged 1,563 percent to a record 6.06 trillion won. Sales swelled 87 percent to a new high of 9.95 trillion won, and operating profit spiked 153 percent to a fresh record of 6.09 trillion won.

HMM attributed the stellar second-quarter performance to a jump in shipping rates on all routes, including those to the Americas and Europe.

Also responsible were the deployment of super-large container vessels, the rationalization of shipping routes and a cut in costs, it added.

Bolstered by the strong first-half performance, HMM’s debt ratio had dropped to 46 percent as of end-June from 73 percent six months earlier.

HMM said its second-half container business may be crimped by the resurgence of COVID-19, jitters over a global economic recession stemming from galloping inflation and rising raw materials prices.

Shares in HMM closed 0.80 percent down at 29,450 won on the Seoul bourse Wednesday, outperforming the broader KOSPI’s 0.90 percent drop. The second-quarter results were announced shortly before the market closed.