HMM on Monday reported “strong results for 2022,” including a 34.8% year-over-year gain in operating profit. But to clarify, the South Korean ocean carrier had strong results for part of 2022, as fourth-quarter operating profit plunged 53.4% year over year.
The first three bullet points in HMM’s financial disclosure statement refer to full-year increases in revenue and operating and net profit. HMM, which reports in Korean won, said 2022 revenue rose 34.7% from 2021 to a calculated $14.54 billion in U.S. dollars. Operating profit climbed 34.8% year over year to an estimated $7.78 billion. It said year-over-year net profit jumped 88.6% to $7.8 billion.
Below the six bullet points is a chart with arrows mostly pointing downward when comparing the fourth quarters of 2022 and ’21 and the fourth and third quarters of ’22.
Operating profit in the fourth quarter dropped 51.6% from just the quarter prior and 53.4% from Q4 2021. Q4 net profit was down 46.4% from Q3 and 47.8% from the prior-year period. Revenue dropped 30.9% between quarters and 20.6% year over year.
HMM alluded to the shift in profits in its fourth bullet point, which said that “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.”
HMM does not issue commentary from company executives with its financial releases, just the bullet points. The fifth bullet point provides only a brief outlook for 2023. “Unfavorable market conditions are expected to continue due to widespread inflation and weak economic growth, putting pressure on demand.”
But those unfavorable market conditions will not spur HMM to make any short-term business changes, according to the sixth and final bullet point. “HMM will stay on course to enhance its business capability in line with the mid-to-long-term strategy unveiled in July 2022,” it said. “Furthermore, HMM will seek to secure high-yield cargoes, promote cost control and improve operational efficiency.”
HMM is the latest Asian ocean carrier to post a sharp Q4 profit drop. OOCL, Evergreen, Yang Ming, Wan Hai and Ocean Network Express all recently reported big decreases.
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