Hyundai Merchant Marine (HMM), South Korea’s leading container carrier, saw its net profit for 2023 plummet by 90% compared to the previous year. Despite this sharp decline, the company managed to maintain profitability throughout the final quarter of 2023, setting itself apart from some of its competitors.
Based in Seoul, HMM faced turbulent waters, notably with a failed attempt to sell off shares recently. Nevertheless, the company achieved a small operating profit of KRW 12 billion (approximately USD 9 million) in the fourth quarter of 2023, avoiding the losses reported by larger rivals. For the full year, HMM’s operating profit for container shipping amounted to KRW 396 billion on revenues of KRW 6.9 trillion. Additionally, the company successfully reduced its debt-to-equity ratio from 25% to 20% during the year.
In a bid to bolster its fleet and operational efficiency, HMM is set to receive twelve 13,000 TEU container ships in the current year, pushing its fleet capacity above 1 million TEU for the first time. With vessels of over 10,000 TEU making up 80% of its fleet post-delivery, the company anticipates significant cost savings and operational enhancements.
Regarding the recent governmental attempt to privatize HMM, the company expressed its commitment to fortifying its business capabilities to navigate the ever-changing market landscape, irrespective of the outcome. In 2023, despite a 66% decrease in rates to an average of USD 976 per TEU for the year, HMM managed to increase liftings by around 3% to 9.8 million TEU. The decline in container earnings was partly offset by improvements in its bulk operations at the group level.
Looking ahead to 2024, HMM foresees a potential recovery in container traffic volumes, albeit dampened by a continued rise in supply due to new deliveries. In response, the company plans to rationalize major route services and expand its long-term contract base to mitigate the impact of increased supply.
Despite the challenges faced in 2023, HMM remains optimistic about its future prospects, emphasizing its commitment to adaptability and fortifying its foundation for sustained growth in the dynamic maritime market.
Source: Alphaliner, HMM
