SOUTH Korean shipping giant Hyundai Merchant Marine (HMM) posted a second quarter net profit - its first in five years - of KRW28.14 billion (US$237.13) after a year-on-year net loss of KRW200.72 billion. Second quarter revenues reached KWR1.38 trillion, down 1.6 per cent year on year.

HMM posted an operating profit of KRW138.7 billion in the second quarter ended June on a consolidated basis, reversing from a loss of KRW2.02 billion in the previous quarter and KRW112.9 billion in the previous year.

The country's flag carrier swung to profit after joining THE Alliance, one of the world's largest shipping alliances, in April, which has broadened its coverage in Europe, and deploying a 24,000-TEU HMM Algeciras, which ramped up its cargo handling capacity, the company said.

HMM's both container and bulk businesses reported solid performance thanks to improved cost efficiency through route rationalisation and lower container costs. Freight rates also increased in the period, helping to improve profitability.

Uncertainty lies ahead in the second half of the year amid escalating conflicts between the world's two largest economies the United States and China and the protracted pandemic, said Singapore's Channel News Asia.

HMM also plans to launch all 12 of its 24,000-TEUers by the end of next month, increasing its capacity to 800,000 TEU, the eighth largest in the global shipping market.

HMM became the dominant player in the country's shipping industry after bigger rival Hanjin Shipping declared bankruptcy in 2017.

HMM was nationalised and underwent massive reform led by state lender Korea Development Bank (KDB) under the government's long-term initiative to rebuild Korea's shipping industry.

Moon Seong-hyeok, minister of the Ministry of Ocean & Fisheries, said that HMM's return to profit is a result of five years of government efforts to rebuild the country's shipping industry.