News / 'New services and focus on profitability' produce bumper Q3 for HMM

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South Korean container carrier HMM was today the latest carrier to report bumper third-quarter figures following soaring spot rates earlier in the year.

HMM today published third-quarter revenues of SKw3,552bn ($2.53bn), a 67% year-on-year rise over the same period in 2023.

Meanwhile, its profits soared: Q3 EBIT of SKw1,461bn was an astonishing 1,822% above the SKw76bn posted last year, and net profit grew 1,731%, to SKw1,739bn.

The results came via a 41.1% operating margin, which the carrier claimed was the highest in the industry.

“Profit growth and enhanced competitiveness were achieved through launching and operating new service routes and a strengthened focus on profitability-driven sales,” it said.

However, HMM’s claim of the highest operating margin was cast in doubt by Alphaliner this morning, the analyst reported higher margins at Taiwanese carriers Wan Hai and Yang Ming.

Earlier this week, Wan Hai reported operating profits of TW$37.5bn ($1.16bn) for the nine months up to September period, which ” implies EBIT profits of TW$24.4 bn for the latest quarter”, Alphaliner wrote, noting that Wan Hai’s Q3 revenues more than doubled compared with a year earlier.

“Based on revenue of TW$54.5bn, the carrier’s operating margin came in at 44.7%, the highest quarterly figure so far reported in the post-Covid era,”

Meanwhile, Yang Ming reported operating profits of TW$54.3bn for the full nine months, and third-quarter profits of TW$32.3bn, based on a year-on-year doubling of revenues, to TW$72.8bn.

“Its operating profit yielded an operating margin just slightly below that of Wan Hai, at 44.4%,” said Alphaliner.

“With freight rates coming off during the quarter, it remained to be seen whether smaller spot market focused carriers such as Yang Ming and Wan Hai could continue to grow earnings.

“The latest numbers confirm it is indeed the case,” it added.

Whether this continues into the fourth quarter remains to be seen – both Yang Ming and HMM are members of the recently renamed Premier Alliance, with part of their fortunes inherently tied together as a result – and HMM warned of challenges ahead.

“Q4 market outlook is weak, due to the off-peak season, although US port strikes may cause supply uncertainty.

“Starting in February, the Premier Alliance + MSC partnership will optimise our transport network and boost revenue,” it said.