HMM records Q2 loss despite higher revenues, volumes

The South Korean liner carrier recorded a loss of 173.7 billion South Korean won (U.S. $152 million) on revenues of KRW 1.24 trillion amid skyrocketing volumes, particularly on the Asia-U.S. West Coast trade.    Hyundai Merchant Marine (HMM) recorded a loss of 173.7 billion South Korean won (U.S. $152 million) for the second quarter of 2017, compared to a profit of KRW 216 billion for the second quarter of 2016, according to a filing on the DART Repository of Korean Corporate Filings.
   However, the South Korean liner carrier posted an operating loss of KRW 128.1 billion for the quarter, which was an improvement from the KRW 254.3 billion operating loss for last year’s second quarter.
   Revenues totaled KRW 1.24 trillion, up 22 percent year-over-year.
   “Although revenues increased, which helped narrow the company’s operating loss, freight rates remained low, denting our bottom line,” HMM said.
   HMM handled around 986,000 TEUs during the quarter, up 46 percent from the second quarter of 2016, according to South Korea’s Yonhap News Agency.
   Just last month, HMM said that on the Asia-U.S. West Coast trade, its volumes rose 77 percent year-over-year in June, from 7,953 TEUs per week to 14,055 TEUs per week, according to PIERS Data.
   Last week, Yonhap reported that HMM was considering allocating more ships to U.S. routes in order to meet demand.
   HMM is projecting there will be a shortage of container carriers on the high-traffic routes from August to October as U.S. customers want more products from China and Southeast Asia.
   “As Maersk and MSC also deliver their products through our container carriers and vice versa on the U.S. routes, we need to consult with them first,” an HMM spokesperson said, according to Yonhap.
   HMM agreed to a strategic cooperation with 2M Alliance members Maersk and MSC back in December involving a combination of slot exchanges and slot purchases between the liner carriers, although Maersk and MSC made it clear the agreement with HMM was “outside the scope” of the 2M Alliance.
   On the Asia to U.S. West Coast trade, HMM purchases slots on three 2M Alliance services, according to ocean carrier schedule and capacity database BlueWater Reporting’s Capacity Report. HMM is also the sole vessel operator on three Asia to U.S. West Coast services.
   Just last week, Pulse News revealed that HMM, along with South Korea’s 13 other container carriers, would be signing a memorandum of understanding this Tuesday to create the Korea Shipping Partnership in hopes of restoring the country’s shipping reputation after its then-largest carrier, Hanjin Shipping, went bankrupt last year.
   HMM said its global on-time performance in June ranked fourth among the 18th largest container carriers, standing at 83.6 percent, trailing behind Hamburg Süd (84.4 percent), APL (84 percent) and Evergreen Line (83.9 percent), according to SeaIntel’s Global Liner Performance Report. HMM’s June result was an 8.6 percentage point improvement from May.