(Photo) HMM Algeciras 1

South Korean carrier HMM today reported a $55m net loss for the first quarter – a dramatic 63.2% improvement on the $149m it lost in the same period last year.

The carrier said its better bottom line was largely due to its cost-cutting efforts, as revenues remained largely unchanged year on year, at $1.1bn.

That shows freight rates held up surprisingly well during the period, as HMM volumes declined by 18.7% to 890,000 teu as the fallout from the pandemic began to manifest itself.

In addition, it said its tanker business had been particularly profitable, as the chronic fall in demand for oil had led to higher tanker utilisation.

“Despite negative impacts, HMM’s ‘profitability’ has enhanced, attributed to cost-saving efforts, optimal utilisation of five VLCCs [very large crude carriers] and securing high-yield cargo, in addition to strong freight rates in the Middle East and India tradelanes,” it said in a statement.

It added that with the effects of the pandemic continuing to persist, “trade volumes are expected to be weakened as a result of demand-side impacts in the US and Europe”, while “rising concerns over the US-China trade tensions related to geopolitical risks also can intensify the situation”.

It claimed it would “focus on maximising profitability through securing lucrative contracts, optimising fleet operation and expanding cost-saving plans”.

Last month it launched the first of 12 24,000 teu vessels, the HMM Algeciras. A second has since been delivered and, with eight 16,000 teu vessels under construction, it has 18 ships to be added to its fleet, increasing overall capacity by just under 360,000 teu, according to Alphaliner data.

Although the ULCVs were expected to join THE Alliance’s Asia-Europe trades, those plans remain subject to considerable uncertainty.

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