South Korean ocean carrier Hyundai Merchant Marine said increased sales and reduced operating costs helped offset a 59.2 percent increase in bunker fuel cost.
Hyundai Merchant Marine (HMM) reported an operating loss of 131 billion South Korean won (U.S. $117 million) in the first quarter of 2017, a slightly smaller loss than the KRW 163 billion recorded in the same period last year.
First quarter 2017 sales amounted to KRW 1.3 trillion, compared with KRW 1.16 trillion in the first quarter of 2016.
The South Korean ocean carrier said its results improved primarily thanks to increased sales and a reduction in operating costs that were offset by a 59.2 percent increase in bunker fuel costs.
HMM transported 958,934 TEUs in the first quarter of this year, a 37 percent increase in container volumes compared with the first quarter of 2016. It said shipments to the “American region” were up 41.4 percent year-over-year and volumes to Asia rose 62.4 percent.
Korea’s Yonhap news service quoted Yoo Chang-keun, HMM’s chief executive officer as saying, “Entering the third and fourth quarters of the year, we will see an improvement,” adding that the company expects to benefit from improved business conditions, reduced costs and realigned routes.
In addition, HMM disclosed Tuesday in a regulatory filing that it expects to complete a previously announced sale and leaseback of 10 containerships with Korea Shipping and Maritime Transportation Co. Ltd., an entity set up by the South Korean government to help the country’s shipping industry.
The ships are valued at about KRW 150 trillion, roughly 2.5 percent of HMM’s assets.
HMM said in the filing that “to compensate for the differences between the market value and the book value of the ships, capital injection of KRW 704.3 billion is expected by Korea Shipping and Maritime Transportation Co., Ltd. consisting of KRW 600 billion worth of perpetual convertible bond and a KRW 104.3 billion paid-in capital increase.”
HMM reports smaller Q1 loss
