HMM's operating profit jumps 370% to W1.39tr in Q3, unveils new shareholder return policy

HMM posted its strongest quarterly earnings in two years in the third quarter of this year, with operating profit approaching 1.4 trillion won and an operating margin of 34%. The shipping company also unveiled a new shareholder return policy setting a dividend payout ratio of at least 30%.

HMM disclosed Thursday that its third-quarter consolidated sales reached 4.13 trillion won ($3.09 billion) and operating profit reached 1.39 trillion won, up 52% and 370%, respectively, from the same period last year. Net profit for the period rose 405% to 1.54 trillion won.

The third-quarter operating profit was the highest since the third quarter of 2024, when it stood at 1.46 trillion won — a gap of two years. Compared with the second quarter of this year, when operating profit came in at 354.1 billion won, the figure surged 294%.

HMM's operating margin of 34% outpaced major global carriers. Denmark's Maersk posted a shipping-segment operating margin of 20.6% in the third quarter, Japan's ONE recorded 21.6%, and China's COSCO came in at 28.7% — meaning HMM's margin exceeded those peers by 5.3 to 13.4 percentage points.

Cumulative sales for the first three quarters of this year reached 10.25 trillion won, up 25% from the same period last year. Cumulative operating profit rose 76% to 2.02 trillion won, while net profit climbed 52% to 2.3 trillion won.

By segment, the container division's cumulative operating profit reached 1.64 trillion won, up 55.3% year on year. HMM said it expanded its transport network through a hub-and-spoke strategy linking major ports and regional hubs, while focusing on securing higher-margin cargo.

The company said adjustments to route operations and cargo mix helped drive the earnings improvement amid heightened volatility in the shipping market — including route uncertainty stemming from the war in the Middle East, port congestion caused by typhoons in China, and drought conditions at the Panama Canal.

Growth in the bulk segment was particularly notable. Cumulative operating profit from bulk operations through the third quarter reached 378.4 billion won, a jump of 418.5% from 73 billion won in the same period last year. The bulk segment's share of total operating profit rose from 6.4% last year to 18.8% this year.

The results reflect a business restructuring HMM began pursuing in the second half of last year, shifting away from reliance on short-term charter contracts toward expanding long-term transport agreements in its bulk operations.

Quarterly operating profit from the bulk segment rose from 45 billion won in the third quarter of last year to 70 billion won in the fourth quarter, then to 83 billion won in the first quarter of this year and 156.3 billion won in the second quarter. It eased slightly to 139 billion won in the third quarter of this year, but that still represents more than three times the level recorded in the same period last year.

HMM is also moving quickly to expand its fleet. As of the end of the third quarter, its bulk fleet stood at 60 vessels, up 16 ships — or 36% — from 44 at the end of the first quarter of last year. Including 22 vessels on order awaiting delivery, the fleet totals 82 ships.

The company is also broadening its scope beyond dry bulk and oil tankers to include car carriers, gas carriers and multipurpose vessels. The strategy aims to increase the bulk segment's contribution to overall earnings, reducing the company's exposure to swings in container freight rates.

Alongside the earnings announcement, HMM revised its shareholder return policy. Under a corporate value enhancement plan announced in January of last year, the company had committed to returning to shareholders the lesser of a 30% dividend payout ratio or a 5% dividend yield based on the market price. The new policy drops the 5% market-price dividend yield benchmark.

Going forward, HMM will apply a dividend payout ratio of at least 30% as its sole shareholder return standard. The payout ratio refers to the proportion of net profit distributed as dividends. Under the previous framework, the 5% market-price yield threshold could result in a lower payout than the 30% ratio depending on the share price; the revised policy removes that variable.

HMM said it expects the change to improve the predictability of dividend payments and strengthen market confidence.

Meanwhile, HMM continues to invest in fleet expansion and business diversification. This year's investment in vessels, logistics infrastructure and future technology development amounts to around 6 trillion won. Cumulative investment since President Choi Won-hyuk took office in March of last year has exceeded 12 trillion won.

By 2030, the company plans to invest a total of 29 trillion won to build a container fleet of 166 ships with a capacity of 1.47 million twenty-foot equivalent units, or TEUs. It also aims to expand its bulk fleet to 110 vessels with a combined capacity of 13.52 million deadweight tons.