News / HMM hits choppier economic waters in Q2 as rates fall amid global tension

Photo: © Marius Steinke | Dreamstime.com

South Korean shipping line HMM has reported a profitable first half of the year, “despite trade headwinds” – but its Q2 numbers tell a different story.  

The flagship carrier’s revenue for H1 was  KRW5.48bn ($3.97bn), giving it a net profit of KRW1.21bn ($879m) and an operating profit of KRW847bn ($614m), resulting in an operating margin of 15.5%. 

Revenue was up 9.1% on H1 24 and net profit rose 5.7%, but operating profit was down 19.4% year on year.  

And a close inspection of Q2 figures reveals the South Korean liner’s H1 profit was largely generated in the first quarter: Q2 revenue was KRW2.62bn, with operating profit at KRW233bn – down 1.5% and 63.8% on Q2 24 respectively. Net profit was down 28.7%, to KRW471bn.  

HMM said the Shanghai Containerized Freight Index (SCFI) had averaged 1,701 points in H1 25, down 27% from 2,319 a year earlier, which reflected “weaker freight rates amid continued US protectionist tariff measures and trade tensions”. And it warned it expected more market volatility in H2, “due to the expiry of tariff grace periods and ongoing renegotiations”, subsequent regional demand shifts, and “sustained supply chain congestion”.  

But the carrier said it would try to mitigate this through flexible fleet deployment, stable revenue from long-term contracts and cost reductions via “vessel efficiency improvements”. 

Meanwhile, Alphaliner reported market rumours that HMM has been eyeing a series of 13,000 teu newbuildings “for quite some time”, and was believed to have chosen LNG as the fuel of choice for the new vessels.

“Unsurprisingly, HMM has asked the ‘big three’ Korean shipbuilders, HD Hyundai, Hanwha, and Samsung, to make offers for up to 12 containership newbuildings of the neo-panamax class,” said the analyst, estimating this would cost HMM some $210m per vessel. 

This follows news that the South Korean flagship carrier had withdrawn its bid to acquire SK Shipping after six months of discussions. It was reported that the two sides had been unable to agree on price. 

HMM said it would, instead, shift its focus to expanding its capacity with new ships and had planned a $17bn investment to double its container fleet by 2030. 

It has already taken delivery of two of nine 9,000 teu methanol-powered box ships, with the remaining seven scheduled to arrive in H1 26.