Hyundai posts Q3 loss despite increased volumes

Korean carrier will “put its utmost efforts to stably secure additional cargoes” to fill the 20 ships on order.

   Hyundai Merchant Marine (HMM) said it had a net loss of 166.7 billion South Korean won ($148 million) in the third quarter, larger than the 60.3 billion won loss the Korean carrier experienced in the same period last year but an improvement from the second quarter of this year when it lost 242.7 billion won.
   Third-quarter revenues this year were 1.426 trillion won, a 10 percent improvement over the same period in 2017 and a 15 percent improvement over the second quarter.
   HMM handled 1,181,981 TEUs in the third quarter of 2018. That was 12.8 percent more than in the same period last year and 2.3 percent more than in the second quarter of this year.
   “In spite of HMM’s efforts in cutting costs and improvement in its revenue and handling volume, net loss continued in Q3 due to an increase in bunker costs and delay in regional rate recovery,” the company said, adding that the “unit cost of bunkers rose 10.4 percent and 43.1 percent from last quarter and the same month last year, respectively.” In particular, total bunker costs in the container business increased by 73.1 billion won.
   Looking forward, HMM said it “will accelerate to acquire good assets such as eco-friendly mega-containerships and terminals through recently secured financial liquidity.”
   HMM said it “expected continuous market uptrend in U.S. trade but slow growth in EU trade. However, a risk of volume decrease attributed to U.S.-China trade war also resides in the shipping market.”
   Noting that “in preparation for the IMO’s sulfur regulations starting from 2020, many carriers announced the introduction of new BAF surcharges and HMM also plans to adopt a new BAF system.”
   HMM said it will “put its utmost efforts to stably secure additional cargoes to fill up the newly ordered 20 eco-friendly mega-containerships.” The company has 12 23,000-TEU containerships and eight 15,000-TEU ships on order.
   “Through fleet expansion and acquisition of good assets, HMM will improve its cost structure and cut logistics costs in order to strengthen its sales competiveness,” the carrier said.