HMM’s shareholders have demanded higher dividends as South Korea’s flagship container carrier has seen its stock price halve with the normalisation of freight markets.
At HMM’s annual general meeting, shareholders complained about how the company’s directors were given performance bonuses despite the lackluster stock price.
While the stock price rallied to close at US$15.16 today, it had reached a 52-week low of US$12.85, previously, falling from US$25.70 in May 2022. Total remuneration for HMM’s directors was set at US$1.5 million.
One shareholder said, “The stock price has halved from its peak, but HMM’s executives are having a performance bonus party. Since shipping is a national industry, I invested with patriotic thoughts.”
Responding, HMM CEO Kim Kyung-bae said, “There’re many causes for the downside pressure on the company’s stock price. The characteristics of the shipping industry, future uncertainties, and the redemption of perpetual bonds, are some of these factors. It’s difficult to resolve these challenges all at once.”
A board meeting agreed on a dividend of US$440 million or US$0.91 per share. However, another shareholder said that given HMM’s record earnings in 2022, the total dividends should be US$756 million.
To that, Kim replied, “We’re reviewing the interim and quarterly dividends, but the company isn’t in a good situation now, so please understand.”
Kim reminded the shareholders that HMM has recovered from its liquidity crunch, which resulted in the state taking control of the company in 2016.
He said, “HMM has grown into a top-notch company with a debt ratio of only 25.5%, and has recorded good performance despite intense competition. In the container sector, we will focus on securing eco-ships and facilities, while in bulk shipping, we will pursue various steps to form a balanced fleet portfolio to become a global shipping business.”
The shareholders’ discontent comes just as the state prepares to wean HMM off its support.
On 10 April, HMM’s largest shareholders, the state-controlled Korea Development Bank and Korea Ocean Business Corporation, kicked off the sale of their majority interests, totalling nearly 40%, after officially appointing as audit firm Samil PricewaterhouseCoopers, law firm Lee & Ko and Samsung Securities as advisors for the process.
Martina Li
Asia Correspondent
