HMM under state-led creditors’ management after funding for grooming as South Korea’s sea flag carrier has been failing to make most of the shipping boom period by reinvesting for future growth as it has to indulge public creditors.

According to disclosures with the Financial Supervisory Service (FSS), HMM registered assets worth 12.22 trillion won ($9.6 billion) including 2.9 trillion won in cash and cashable assets as of the end of March, each surging 273 percent and 136 percent compared to the previous year.

During the lengthy shipping slump period from 2009 to 2019, the shipper annually reported deficit of 440 billion won.

HMM earned an operating profit of 3.15 trillion won in the first quarter alone and its debt ratio sank to 59.7 percent at the end of March, a dramatic turnaround from 2,499 percent in 2015.

Yet the cargo carrier has not been able to put the income in productive use.

During its investor relations call after the release of first-quarter earnings this year, HMM promised to enhance fleet and freight orders, improve operating health and upgrade IT systems. The plan lacked specifics. It was more eager about paying out cash dividend of 293.4 billion won for the first time in 11 years.

About 40 percent of the dividends went to state enterprises according to their stakeholding from bailout funds.

Korea Development Bank (KDB) and Korea Ocean Business Corp. (KOBC) each own 20.69 percent stake and 19.96 percent of HMM, respectively

Global shippers on the other hand have been investing heavily from the shipping boon momentum.

Denmark’s Maersk Line is advancing into land and air shipping sectors in preparation for the maritime shipping down cycle.

HMM has no other plan for the future except to add eco-friendly ships.

According to Hwang Yong-sik, a professor in the economics department at Sejong University, the KDB needs to heighten efforts to privatize the company so it does not fall behind in the global maritime industry.

“If the owner of HMM was a private company, it would have been able to come up with more aggressive investment plans for the future,” said Jon Joon-soo, a professor in the economics department at Sogang University.

The stock as result has been stalemated this year despite strong earnings. Shares on Monday added 5 percent to 25,300 won, but was still off 7 percent from its year opening.

By Moon Gwang-min and Susan Lee

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]