© Vladimir Serebryanskiy HMM
© Vladimir Serebryanskiy

Despite a nine-month operating loss of KRW288bn ($258m), Hyundai Merchant Marine (HMM) is in a much better position than it was a year ago.

The South Korean carrier has cut its losses by more than two-thirds, after last year’s third quarter left it down KRW647bn.

Despite the comparatively brighter outlook, industry sources said the carrier had been hobbled by a business model that sees it perform as a slot charterer on Asia-Europe trades.

“It is also having to be incredibly competitive on the transpacific routes to overcome the negatives of financial restructuring,” said one industry commentator.

“And, as stated by Drewry last time around, it was forced into discounting rates heavily in order to grow its business.”

Revenues for the nine-months to September leaped more than 15% to KRW3.8trn, but failed to prevent not only the operating loss, but also a net loss of KRW968bn.

This, the carrier said, was in part down to the book value of 10 vessels sold to Korea Shipping and Maritime Transport being priced KRW479bn south of their true value.

However, third-quarter numbers showed a better performance: last year’s operating loss of KRW288bn cut by 87% year on year, leaving the carrier a loss of just KRW29.5bn

Revenue growth during the three months to September was also impressive: up 20.1% to KRW1.3trn, although much of this was likely down to “heavy discounts”.

Surging revenue for the quarter continued an upward trend in container volumes, which exceeded 1m teu for the three-month period, compared with 743,572 teu in 2016.

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