<\/p>\n
This year, the performance of Korea\u2019s major shipping companies is expected to diverge. HMM\u2019s operating profit is projected to drop about 40% due to a slowdown in the container ship market. In contrast, mid-sized players Pan Ocean and Korea Line Corporation are likely to see a slight increase in operating profit on the back of an improving bulk carrier market and expanding energy demand.<\/p>\n
According to the shipping and securities industries on the 2nd, HMM\u2019s operating profit this year is expected to fall below the \u201c1 trillion won\u201d level again. HMM posted 3.4797 trillion won in operating profit in 2024, joining the \u201c1 trillion club\u201d of corporations with annual operating profit of 1 trillion won or more. Considering that operating profit a year earlier, in 2023, was 564.7 billion won, it amounted to a \u201cspectacular comeback.\u201d<\/p>\n
In the securities sector, the view is that HMM will post operating profit in the 800 billion won range this year, dropping out of the \u201c1 trillion club\u201d for the first time in three years. With operating profit for 2025, to be announced in mid-Feb., projected at about 1.3 trillion won, the outlook is for roughly a 40% decline in operating profit this year.<\/p>\n
Hana Securities presented 858 billion won as HMM\u2019s operating profit. That is down 38% from the 2025 annual operating profit estimate (1.378 trillion won). Shinhan Investment & Securities put this year\u2019s operating profit at 827 billion won, a 40% decrease from last year\u2019s estimate (1.37 trillion won).<\/p>\n
The projected deterioration in operating profit is attributed to \u201ccontainer ship oversupply\u201d and \u201cglobal freight rate declines.\u201d Container ships account for more than 80% of HMM\u2019s revenue, and oversupply is anticipated.<\/p>\n
According to Korea Maritime Institute (KMI), new deliveries of container ships this year total 226 vessels and 1.54 million TEUs (1 TEU is one 20-foot container). Of these, large container ships of 10,000 TEU or more are expected to account for 65% of all deliveries.<\/p>\n
As a result, the Shanghai Containerized Freight Index (SCFI) is expected to average 1,100\u20131,300 points this year, down 18\u201331 percentage points from last year. However, there is also analysis that HMM\u2019s operating profit could improve in 2027.<\/p>\n
Ahn Dohyun, an analyst at Hana Securities, said, \u201cHMM is diversifying its investments by ordering very large crude carriers (VLCCs) in preparation for the container ship downcycle and participating in the Brazil terminal bid.\u201d<\/p>\n
In contrast, mid-sized shippers such as Pan Ocean and Korea Line Corporation are expected to see improved operating profit this year. That is because the outlook for the bulk carrier market is bright and the share of energy carriers, where demand is rising, is large. Unlike container ships, which load containers by crane, bulk carriers load large quantities of raw materials directly without packaging.<\/p>\n
Pan Ocean is expected to improve its results as the bulk carrier market strengthens on improved steel demand in China and emerging markets and the resumption of U.S.-China grain trade. Korea Investment & Securities Co. presented 531 billion won as Pan Ocean\u2019s operating profit for this year. That projects an increase of about 8% from last year\u2019s estimate (490 billion won). Shinhan Investment & Securities presented 522.4 billion won, seeing a 6% rise from last year\u2019s estimate (489.2 billion won).<\/p>\n
Korea Line Corporation is expected to benefit from rising global demand for liquefied natural gas (LNG). Korea Investment & Securities Co. projected operating profit of 220 billion won this year, up 4% from last year\u2019s estimate (211 billion won). Samsung Securities forecast operating profit of 222 billion won this year, a 5% increase from last year\u2019s estimate (211 billion won).<\/p>\n
Choi Gowoon, an analyst at Korea Investment & Securities Co., said, \u201cKorea Line Corporation took delivery of four LNG carriers in 2022, and results in this area are improving,\u201d adding, \u201cAs the operating profit share of LNG carriers rises into the 40% range, the liability ratio also plunged from 292% at the end of 2020 to 76% at the end of the third quarter last year.\u201d
A source in the shipping industry said, \u201cThis year\u2019s shipping market can be summed up as container slowdown and bulk carrier improvement,\u201d adding, \u201ccorporations that prepared in advance for energy demand can ease performance worries for longer than expected.\u201d
Source: ChosunBiz<\/p>\n
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