South Korean container carrier Hyundai Merchant Marine (HMM) managed to narrow its operating loss to KRW 128.1 billion (USD 111.8 million) in the second quarter of 2017 from KRW 254.3 billion (USD 222 million) recorded in the same period a year earlier.
The company’s operating loss in container business stood at KRW 96.2 billion, improved by KRW 123.8 billion YoY from KRW 220 billion due to various cost-saving efforts.
HMM ended 2Q 2017 with a total revenue of KRW 1,241.9 billion, a 22.1 percent increase when compared to a revenue of KRW 1,016.8 billion seen in the same quarter last year.
Total revenue in USD increased by 26.4 percent due to the influence of foreign currency translation gain.
Container volume in 2Q rose by 45.5% YoY to 986,022 TEU from 677,540 YEU reported in the three-month period of 2016. Volumes in the US trades climbed by 34.5% and in Intra-Asia by 94.5%.
“2Q’s total revenue, operating loss, transported volume, and container utilization ratio have all improved YoY. However, SCFI rate – to US – that dropped 25% in 2Q QoQ hindered drastic improvement in profit,” HMM said.
“Increased cost occurred as to 2M+H’s re-allocation of vessels for the reorganization of services. However, this shuffle will contribute to profit in 3Q as the reorganization has been completed,” the company added.
As explained, container freight rate is improving as the peak season begins and this is likely to continue as to increasing transport volume in the US trades.
For the US trades, China and South East Asia market have been showing great improvement with the arrival of peak season, and freight rate in July has increased dramatically, HMM further said.
HMM expects over 100% of loading rate in Asia-US trades after July and is considering deploying extra vessels if necessary.
“3Q results will be dramatically improved with our regained trust from all customers and our continuous cost saving efforts. We will do our best to grow further as Korea’s national carrier and contribute to rebuilding Korea’s maritime business,” an official from HMM commented.