SIMIC

SOUTH KOREAN flag carrier HMM posted an 88 per cent year on year net profit in 2022 to US$7.9 billion drawn on $14.5 billion in revenue, an increase of 35 per cent.
HMM, formerly known as Hyundai Merchant Marine) is the latest carrier to report a highly elevated 2022 result, but warned the "unfavourable market conditions," that led to a collapse in container shipping spot rates through the fourth quarter will continue in 2023.
HMM saw an eight per cent increase in volume in the fourth quarter, despite slowing demand in major markets, but admited that it faced tougher conditions in the coming year.
"The freight rates in most key trade lanes have been under downward pressure since H1 2022, led by a slowdown in demand and the ease of supply chain strain," said the company. "Unfavourable market conditions are expected to continue due to widespread inflation and weak economic growth, putting pressure on demand."
Despite a 3.5 per cent drop in volume to 3.68 million TEU, the sharp increase in net profit was built on the average rate per TEU for the year of $2,881, an increase of 12.2 per cent.
HMM revenue in the fourth quarter was down 20 per cent year on year at $2.7 billion, with operating profit falling 53 per cent to $999 million. Net profit in Q4 plunged 48 per cent to $1 billion.
The supply-demand imbalance will continue to drag down rate levels through the first half, with the National Retail Federation (NRF) expecting H1 US imports to fall almost 20 per cent year over year as "worried" consumers dial back their purchasing in a slowing economy.