In the midst of a partial privatization process, South Korean shipping carrier Hyundai Merchant Marine (HMM) has reported a net profit of KRW 95 billion (USD 71.8 million) for the third quarter. The figure, while seemingly positive, raises concerns about potential upcoming losses, especially considering the challenging backdrop the maritime industry currently faces.
During Q3, container revenue for HMM experienced a significant decline of 63%, reaching KRW 1.74 billion. Operating profits (EBIT) from container activities plummeted by a staggering 99%, amounting to KRW 21 billion (USD 15.8 million). These results contribute to a cumulative nine-month performance of KRW 384 billion (USD 289 million).
Despite a 4% increase in volumes to 2.84 million twenty-foot equivalent units (TEU) over the nine-month period, HMM faced challenges in maintaining profitability. The average rates per TEU dropped from USD 3,318 in the same period last year to USD 993 this year. The third quarter witnessed a further decline to an average of USD 946 per TEU, marking the sixth consecutive quarterly decrease.
Lower fuel costs and charter fees, along with increased container volumes, contributed to an overall net profit of KRW 705 billion (USD 532 million) for the full nine months. However, HMM is bracing for a challenging fourth quarter due to the conflict in Israel and elevated interest rates. T
he company anticipates potential impacts on carrier supply management but remains hopeful that enforced rate increases could offset some of the challenges. In response to the tough market conditions, HMM is set to continue its strategic measures, including rationalizing major route services and implementing rigorous capacity supply and cost control initiatives. The company reported an average loading rate of 92.9% for its container fleet from January to September, with specific breakdowns indicating 96.2% for Europe services and 88.7% for services to the Americas.
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