HMM said Friday it posted third-quarter net profit of $20.5 million, a huge swing from the $103.4 million loss in Q3 2019.
But the South Korean container carrier was cautious in its outlook.
“The reemergence of the COVID-19 pandemic in the winter season is indeed a serious threat to [the] global economy,” HMM said in its earnings release. “In addition, the continued trade tensions between the U.S. and China and, most recently, the U.S. presidential election will have a considerable impact on global trade.”
HMM said Q3 revenue was up 18.7% to $1.43 billion from $1.2 billion in the third quarter last year. Q3 operating profit took a big jump, from $38.8 million in 2019 to $230.7 million this year.
It noted that “the operating profit during the third quarter has nearly doubled quarter-on-quarter, achieving an operating margin of 16.1% as compared to 10.1% from the second quarter.”
HMM had turned a corner with quarterly results in Q2, achieving a net profit in the second quarter of $23 million — a $193.3 million year-over-year shift from negative $166 million in 2019.
“HMM continued to make profits in the third quarter following the previous quarter of this year, primarily driven by its efficient fleet operations, including a dozen 24,000-TEU container ships, a string of cost-cutting measures and increased freight rates,” Friday’s earnings release said.
HMM announced in early October that all 12 ships with a capacity to carry 24,000 twenty-foot equivalent units (TEUs) had been deployed and were carrying cargo. The first, the HMM Algeciras, was deployed in April carrying 19,621 TEUs.
Container volume did dip 2.8% to 1.04 million TEUs in Q3, HMM said.
But HMM said it expected strong volume in Q4 “as retailers in the U.S. and Europe have continued to replenish inventories ahead of the year-end holidays and the Chinese New Year in 2021.”
It did acknowledge the limited container availability the global shipping community currently faces.
“The scarcity of container equipment, which has negatively affected the main east-west trade lanes, currently spreads to the intra-Asia trade,” HMM said, adding that it was focused on “empty evacuation to Asia from elsewhere, including the U.S., Europe and West Asia regions, in an effort to enhance the logistics flow and ease the situation.”