South Korean liner giant HMM saw profits soar in the first quarter as container freight rates doubled.

The Seoul-based carrier saw net profit climb by 63% to KRW 485bn ($353m) in the first three months, up from KRW 298bn in the same period last year.

Both revenues and profits increased over the period as average container freight rates more than doubled.

Looking ahead, HMM said the main economic indicators were “favourable” despite ongoing market uncertainty.

The company flagged consistent consumer demand, helped by the recovery of the US economy.

Other positive factors include the growth in online business from China and the easing of inflation, said the liner giant.

However, the company is preparing a cost-cutting programme to prepare for rapidly shifting market conditions.

HMM saw revenues rise 12% to KRW 2.3trn ($1.67bn) in the first quarter of the year.

Operating profit climbed by 33% to KRW 407bn and operating margin was 17.5%.

Fleet expansion

These results are the first since a proposed sale of the company fell flat earlier this year.

HMM is considered a state-owned company as its major shareholders are Korea Development Bank and Korea Ocean Business Corp. KDB and KOBC, which control 57.9% of HMM, want to privatise the company.

They were planning to sell their stakes to a consortium of Harim Group — the country’s largest poultry processor — and JKL Partners for $4.8bn in February, but the sale failed due to “differences over certain issues”.

Since then, HMM has unveiled plans for a big fleet expansion by 2030.

The company plans to increase its container ship and bulker fleet extensively to strengthen its global competitiveness.

HMM unveiled a target to increase its container shipping capacity from the current 84 vessels of 920,000 teu to 130 ships of 1.5m teu.

The growth in the boxship fleet will enable it to expand its global service network and shipping routes.

In its bulk shipping business, which includes dry cargo, tankers, car carriers and heavylift vessels, the company is looking to swell the number of ships from 36 totalling 6.3m dwt to 110 totalling 12.28m dwt.

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