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An HMM-operated container vessel. (Photo courtesy of HMM) |
[Alpha Biz= Paul Lee] U.S. protectionism and vessel oversupply weigh on earnings, though fourth-quarter results outperform some global peers
HMM reported a sharp decline in earnings last year, with operating profit nearly halved amid falling freight rates on major routes.
On Feb. 11, the company announced annual revenue of KRW 10.8914 trillion and operating profit of KRW 1.4612 trillion. Compared with 2024, revenue fell 6.9% while operating profit plunged 58.4%.
The downturn was attributed to worsening market conditions following a shift in U.S. trade policy. After the inauguration of President Donald Trump’s administration, stronger protectionist measures—including tariff hikes—dampened global trade volumes.
At the same time, the container shipping industry faced oversupply, as new vessels ordered during the COVID-19 pandemic were delivered in succession while scrapping remained limited.
As a result, freight rates declined across most routes. HMM said average rates on its key U.S. West Coast route fell 49%, while rates to the U.S. East Coast dropped 42%. European routes also saw a 49% decline.
Despite the challenging environment, HMM’s fourth-quarter performance was viewed as relatively resilient. Fourth-quarter revenue totaled KRW 2.7076 trillion, down 14.2% year-on-year, while operating profit declined 68% to KRW 313.7 billion.
Industry observers noted that several global competitors posted operating losses in the same period, including the container division of Denmark’s Maersk and Japan’s Ocean Network Express (ONE), suggesting HMM managed to outperform some peers despite the downturn.
Alphabiz Reporter Paul Lee(hoondork1977@alphabiz.co.kr)
