HMM's profits plummet while Pan Ocean and Korea Line thrive amid changing market dynamics, reports ChosunBiz.
The performance of South Korea's shipping majors is set to diverge this year, with HMM facing a sharp fall in profits while Pan Ocean and Korea Line Corporation are expected to post gains, reports Seoul's ChosunBiz.
HMM's operating profit is projected to drop by about 40 percent as container ship oversupply and falling freight rates weigh on results. Analysts expect profit in the KRW800 billion (US$55 million) range, down from KRW1.3 trillion in 2025. HMM had posted KRW3.48 trillion in 2024, marking a strong comeback from KRW564.7 billion in 2023.
Hana Securities forecast an operating profit of 858 billion won for HMM, down 38 percent from last year, while Shinhan Investment & Securities projected 827 billion won, a 40 percent decline. Container ships account for more than 80 percent of HMM's revenue, leaving the company exposed to market oversupply.
The Korea Maritime Institute stated that 226 new container ships totaling 1.54 million TEU will be delivered this year, with large vessels of 10,000 TEU or more making up 65 percent. The Shanghai Containerised Freight Index is expected to average 1,100-1,300 points, down 18-31 points from last year.
Analyst Ahn Dohyun of Hana Securities noted that HMM is diversifying by ordering very large crude carriers and bidding for a Brazil terminal to offset the container downturn. Some forecasts suggest profits could recover in 2027.
In contrast, Pan Ocean and Korea Line Corporation are expected to benefit from stronger bulk and LNG demand. Pan Ocean's operating profit is projected at KRW531 billion by Korea Investment & Securities, up eight percent from last year, while Shinhan put the figure at KRW522.4 billion, a six percent rise.
Korea Line Corporation is forecast to post 220-222 billion won in operating profit this year, up 4-5 percent from last year, driven by LNG demand. Analyst Choi Gowoon noted that the firm took delivery of four LNG carriers in 2022, lifting LNG's share of profit to about 40 percent and cutting its liability ratio from 292 percent in 2020 to 76 percent last year.
A shipping industry source stated that the market outlook this year can be summed up as a container slowdown and bulk carrier improvement, adding that firms positioned for energy demand are better placed to sustain performance.
