Despite strong earnings in the first three quarters of 2022, Asian shipping lines HMM and Yang Ming are cautious about the future.
HMM, which reports in Korean won, said its third-quarter revenue rose 27.1% year on year to 5.1 trillion won (US$3.76 billion) from 4 trillion won (US$2.7 billion). dollars) had risen. Operating profit for the third quarter was 2.6 trillion won (US$1.9 billion), up 14.5% from 2.27 trillion won (US$1.68 billion) in the third quarter of 2021, and the Net profit was 2.61 trillion won (US$1.91 billion), up 13.3% from 2.3 trillion won (US$1.7 billion) last year.
In the first nine months of 2022, revenue totaled 15 trillion won (US$11.13 billion), up 61% from 9.3 trillion won (US$6.91 billion) in the same period of the previous year, and operating profit was 8.6 trillion won (US$6.42 billion), up 85.7% from 4.6 trillion won (US$3.46 billion) in 2021. Net profit rose 225% from 2.6 trillion won ($1.97 billion) in 2021 to 8.6 trillion won (6.41 billion U.S. dollars) in the first nine months of 2022, HMM said on Wednesday .
“HMM maintained a robust operating margin of 57.7% on a cumulative basis for nine months in 2022, driven by favorable market conditions and ability to sell despite rising costs,” read the statement of operations. “HMM will seek to maximize profitability by securing high-yield cargo and implementing cost-cutting measures by improving operational efficiencies.”
Looking ahead, the South Korean carrier said that “container demand is expected to come under downward pressure due to significant uncertainties, mainly related to widespread inflation, the economic downturn and geopolitical tensions.”
HMM added that the weakening purchasing power and increased inventories of major retailers would also have a negative impact on global container volumes.
In July, HMM unveiled a $11.3 billion growth strategy that includes expanding the capacity of its container ship fleet from 820,000 20-foot units to 1.2 million TEU, acquiring terminals and ramping up its digitization efforts.
Yang Ming faces ‘uncertainty’
In its two-paragraph press release on Thursday, the Yang Ming Marine Transport Corp. third-quarter profit after tax of NT$49.75 billion (US$1.7 billion) in New Taiwan dollars, with earnings per share of NT$14.25.
Consolidated sales in the third quarter totaled NT$99.81 billion (US$3.41 billion), Yang Ming said. The Taiwanese carrier didn’t provide comparisons with previous quarters, but in August, Yang Ming reported second-quarter consolidated revenue, converted to US dollars, totaling US$3.8 billion.
The Taiwanese carrier announced on Thursday that its after-tax profit for the first three quarters of 2022 “improved” by 50.95% year-on-year to NT$165.86 billion (US$5.66 billion). Consolidated revenues for the first three quarters totaled NT$315.96 billion (US$10.79 billion).
“In the first three quarters of 2022, the ongoing war between Russia and Ukraine and the global inflation spurt impacted the container shipping industry,” Yang Ming said in the statement. “The unresolved port congestion and deadlocked contract negotiations on the west coast of the USA have made the supply chain even more uncertain. Faced with these challenges, Yang Ming will continue to uphold the integrity of the schedule and remain cautiously optimistic in the fourth quarter.”
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