HMM rakes in record quarterly profits on higher freight rates

HMM Co., South Korea’s largest container line, posted fresh record sales and profits in the third quarter, boosted by higher freight rates and increased cargo volumes as the global economy gradually returns to normal.

Its net profit surged more than ninetyfold to 2.29 trillion won ($1.93 billion) in the three months to September from the same period a year ago.

Operating profit increased more than eightfold to 2.27 trillion won, while sales more than doubled to 4.16 trillion won.

“Freight rates and cargo volumes on all of our routes, including the Asia-America route, rose in the third quarter,” said a company official.

The company has been posting record earnings since the fourth quarter of last year.

In the first nine months of this year, it reported an operating profit of 4.68 trillion won on sales of 9.35 trillion won.

If the trend continues, HMM is widely expected to run a full-year operating profit of over 6 trillion won.

The shipper’s stellar third-quarter performance comes as many countries are lifting their lockdown measures, fueling a drastic recovery in freight volumes amid a shortage of container ships.

SHIPPING COSTS AT AN ALL-TIME HIGH

With the resumption of business activities, global shipping costs have soared, sending the Shanghai Containerized Freight Index (SCFI) to all-time highs.

The index rose to a high of 4,647.6 in October, up 67% from 2,870 earlier this year.

HMM, formerly known as Hyundai Merchant Marine, was taken over by the state-run Korea Development Bank (KDB) in 2016 after the company accumulated huge losses amid an industry slowdown.

The state-run bank is exploring a sale of its stake in the container ship carrier to recover taxpayers’ money it injected into the company.

Shares of HMM rose 1.1% at 27,000 won in early Thursday trade in Seoul, outperforming the broader Kospi index’s 0.8% fall.

Write to Jeong-Min Nam at peux@hankyung.com
In-Soo Nam edited this article.