By Alexander Whiteman (The Loadstar) – Hyundai Merchant Marine (HMM) has calmed the waters that led it to the brink of bankruptcy with first-quarter results showing a reduction in operating losses and an upturn in volumes handled.
The heir-apparent to Hanjin as South Korea’s de facto flag-carrier, HMM reduced its operating loss to $117m in the three months to March, compared with $144m last year.
Volumes were up 37%, year on year, to 958,000 teu, with spikes of 41.4% and 62.4% on shipments to the Americas and Asia.
HMM chief executive Yoo Chang-kuen told the media he expects a further improvement in company performance over the third and fourth quarters of the year.
Over the first quarter, sales increased 7%, year on year, to $1.1bn, and expects continued freight rate improvements as the year progresses.
Mr Chang-yuen said wanted improved business conditions, reduced costs and realigned routes to lead to stable profits by next year.
The volume increase would suggest HMM benefited from Hanjin’s collapse last August by having space available. In December, Alphaliner reported HMM’s transpacific market share rose 2.2%, to 6.6%, with the carrier handling 80,376 teu in November compared with 58,742 in August.
The analyst questioned whether HMM could maintain this share of the market, but by January reports emerged that its market share had climbed again, to 7.5%.
While HMM hasn’t so far increased its fleet, it is set to cull short-term capacity, with six 10,000 teu and three13,000 teu vessels due for charter, the latter destined for its 2M partners.
This forms part of the agreement reached with Maersk and MSC that allowed it become part of the alliance, albeit as a junior member.
HMM would need to considerably expand its fleet to meet long-term plans unveiled in December for global market share to rise 5% by 2021 – an ambition described by Alphaliner as “far-fetched”.
According to the analyst, HMM would need to add 650,000 teu of capacity to its fleet, while noting that the carrier had said it would not “be engaged in overly active fleet expansion”.
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