HMM Co. said Monday its first-quarter earnings tumbled more than 90 percent on-year on sluggish shipping rates amid decreased cargo volume.
Net profit came to 285.3 billion won (US$214 million) in the January-March period, down 90.9 percent from a year earlier, South Korea's top container shipper said in a regulatory filing.
Operating income nose-dived 90.3 percent on-year to 306.9 billion won, with sales plunging 57.7 percent to 2.01 trillion won.
Its first-quarter results were far below market forecasts. HMM's first-quarter operating income was lower than the median estimate of 549.8 billion won in a survey of three brokerages by Yonhap Infomax, the financial news arm of Yonhap News Agency.
The company's sales were also lower than the average market forecast of 2.34 trillion won.
HMM said its operating profit and top line dropped sharply in the first quarter from a year earlier as shipping rates normalized to pre-pandemic levels amid falling cargo volume.
The Shanghai Containerized Freight Index, a barometer of global freight rates, averaged 969 points in the first quarter, compared with 4,851 a year earlier.
Industry watchers predicted freight rates to remain sluggish for the time being due to such negatives as interest rate hikes in major economies and the prolonged war in Ukraine.
Despite the tumble in operating income, HMM said its operating margin came to 14.7 percent in the first quarter, better than pre-pandemic levels.
HMM said it will ramp up efforts to hone its competitive edge down the road by rationalizing shipping routes, boosting managerial efficiency and cutting costs.
Shares in HMM closed 2.54 percent lower at 19,180 won on the Seoul bourse Monday, underperforming the broader KOSPI's 0.16 percent gain. The first-quarter results were announced before the market close.
Source: Yonhap News Agency