HMM profits from container spot rate surge

For H1 2024 HMM disclosed a net profit of KRW1.15 trillion ($838.4 million) compared to KRW610 billion in the first half of the previous year. Revenues were up 18.6% in the first half of the year at KRW 4.99 trillion.

The shipping company highlighted the sharp rise in the Shanghai Containerized Freight Index (SCFI) increasing from 976 points in H1 2023 to 2,319 points in H1 2024.

“A boost in freight rates and the strengthening of profitability-oriented operations resulted in a growth in revenue and profits,” HMM said.

The sharp increase in HMM’s profitability points to a relatively high exposure to the spot market relative to cargo on long term contract compared to many of its competitors. The company highlighted an H1 operating margin of 21.1%.

Looking ahead HMM commented, “Considerable uncertainties as a result of geopolitical risks and global trade tensions will probably make a sudden shift in the global shipping market.” A boost in freight rates and the strengthening of profitability-oriented operations resulted in a growth in revenue and profits. 

Much as the Red Sea Crisis has unexpectedly boosted container shipping and end to attacks by the Houthis on commercial vessels in the Red Sea and the Gulf of Aden could quickly reverse this impact.

Related:Maersk remains positive as box demand outlook cools

HMM has been adjusting its network to meet changes demand and in common with many of its competitors launching new routes to connecting to Mexico. It is also investing in newbuildings and secondhand vessels.