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HMM’s net profit sank 90% to KRW 1.06 trillion (US$794.73 million) in 2023 from 2022
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The South Korean shipping firm said demand slowdown and a normalization in the container shipping market caused the downward pressure on freight rates that have led to lower earnings
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For the fourth quarter of 2023, the carrier saw its earnings sink 79% year-on-year to KRW 301 billion (US$225.67 million)
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HMM is planning to take delivery of twelve 13,000-TEU containerships, reaching a fleet capacity of 1 million TEUs this year
HMM’s net profit sank 90% to KRW (South Korean won) 1.06 trillion (US$794.73 million) for 2023, compared to KRW 10.117 trillion ($7.585 billion) in 2022, according to preliminary figures released on February 14.
The South Korean shipping firm cited demand slowdown and the influx of new containerships that led to the normalization of the container shipping market as having put freight rates in key trade lanes under downward pressure during 2023, pulling down revenue.
For the fourth quarter of 2023, the carrier saw its earnings sink 79% to KRW 301 billion (US$225.67 million) from KRW 1.415 trillion year-on-year.
The company noted increased uncertainty and market volatility due to challenges of ongoing disruptions in the Red Sea and a severe drought in the Panama Canal.
Despite the negative results, the company said its financial structure is “solid”, with debt-to-equity ratio having slightly improved to 20% in 2023 from 25% in 2022.
HMM said it plans to take delivery of twelve 13,000 twenty-equivalent unit vessels for 2024, reaching a fleet capacity of 1 million TEUs. Once completed, large containerships of more than 10,000 TEU will account for 80% of HMM’s fleet, enhancing cost structure and operational efficiency, the company said.
READ: HMM welcomes first of twelve 13,000-TEU green containerships
Despite recent challenges, HMM said it remains committed to strengthening its business capabilities for “swift response to the ever-changing market environment” and securing a robust foundation for future growth.
