HMM's net profit hits 2.9 trillion won in the second quarter

HMM’s cargo ship [HMM]

HMM reported a net profit of 2.9 trillion won ($2.2 billion) in the second quarter, surging 1,293.4 percent on year helped by higher freight rates.

The figure beat analyst expectations of a 2.8-trillion-won net profit compiled on FnGuide.

The shipping company logged revenue of 5.03 trillion won, up 73.2 percent on year, also beating analyst expectations of 4.8 trillion won.

HMM has been reporting record-high quarterly revenue since the fourth quarter of 2020, but failed to reach the milestone in the second quarter.

The shipping company said freight rates in all places it ships to, especially in the United States and Europe, rose and helped it improve profitability. The Shanghai Containerized Freight Index (SCFI) was 4,211 in the second quarter, up 29.2 percent on year.

HMM may not be able to rely on rising rates in the third quarter. The index peaked on June 10 at 4,233.31 and has been falling. It was 3,739.72 as of Aug. 5., down 11 percent on month.

Although freight rates increased, fuel costs rose as well. The company’s fuel costs rose 70.7 percent in the first half as international crude oil prices rose.

HMM said growth for its container shipping and dry-bulk business could slow in the third quarter as inflation and higher raw material costs reduces orders. But it said it will try to sign more long-term contracts to ship frozen foods.

Its oil tanker business is expected to improve, helped by European countries looking for new companies that can ship oil for them instead of Russian companies.

BY LEE TAE-HEE [lee.taehee2@joongang.co.kr]