South Korea’s HMM Co. reported strong first-quarter earnings, with operating profit up nearly 51 percent on year despite a continued drop in global shipping rates.

The shipping company announced on Wednesday that its consolidated revenue rose to 2.85 trillion won ($2.02 billion), up 22.5 percent from the same period a year ago. Operating profit reached 613.9 billion won, up 50.8 percent during the same period.

Net income climbed to 739.7 billion won, up 52.5 percent from a year earlier.

The company’s operating margin improved to 21.5 percent, up 4 percentage points from 17.5 percent in the first quarter of 2024.

Although shipping demand spiked last year due to aggressive stimulus policies in advanced economies, the first quarter of 2025 saw a decline in freight rates.

The Shanghai Containerized Freight Index (SCFI) fell from an average of 2,010 in the first quarter of 2024 to 1,762 this year, bottoming out near 1,300 in late March.

Industry experts caution that HMM’s earnings may weaken in the second quarter due to tariff-related uncertainties stemming from U.S. trade negotiations and ongoing disruptions in the global supply chain.

A decline in shipping volume from China to North America may also continue to weigh on rates, they said.

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