HMM Co., South Korea's leading container shipper, is forecast to see its record-breaking earnings streak take a breather for the second quarter of the year due to a downturn in freight rates, analysts said Monday.
The shipper's bottom line is estimated to reach 4.84 trillion won ($3.71 billion) for the April-June period, a tad lower than 4.92 trillion won for the first quarter, according to a market consensus compiled by Yonhap Infomax, the financial news arm of Yonhap News Agency.
Its operating profit for the last quarter is projected to come to 2.93 trillion won, also below the previous quarter's 3.15 trillion won.
The country's top shipping company is scheduled to announce its second-quarter results this week.
The rather downbeat outlook comes after HMM renewed record sales and operating profit for the sixth consecutive quarter in the first three months, buoyed by high freight rates amid global supply chain disruptions sparked by the coronavirus pandemic and the war in Ukraine.
Analysts cited a drop in shipping rates amid growing concerns over a global economic recession and the easing of worldwide port congestion.
The Shanghai Containerized Freight Index (SCFI), a barometer of global freight rates, averaged 3,739.72 on Friday, down 148.13 points from the prior week.
After peaking at 5,109.60 on Jan. 7, the index fell for 17 weeks running before bouncing back on May 20, but it swung back to a downturn following a four-week winning run.
The South Korean currency's recent weakness against the US dollar, however, comes as a boon to HMM's earnings, according to market watchers. (Yonhap)