26 November 2017

[261117.EN.BIZ] Korea's HMM, SM Line Still in The Red, But Signs of Improvement Emerge



SOUTH Korea's Hyundai Merchant Marine (HMM) and SM Line are making headway in their quest to revive their nation's ocean liner industry in the wake of Hanjin Shipping's bankruptcy, although they are still suffering from operating losses.
HMM's third quarter operating loss of KRW28.3 billion (US$26 million), which included its terminal operation, marked a sharp improvement on the loss of KRW212.27 billion that the restructured carrier recorded over the same period in 2016.

Revenue in the third quarter surged by 20 per cent year on year to reach KRW1.3 trillion, and liftings rose 41 per cent to 1.04 million TEU, The Loadstar, UK reported.

Following its exclusion from THE Alliance due to its dire financial position, HMM joined the 2M vessel sharing agreement (VSA) as a slot charterer on Maersk and MSC vessels from Asia to Europe and with standalone services on the transpacific trade.


As for SM Line, which commenced one Asia-US west coast service in April after it acquired the transpacific assets of bankrupt Hanjin, is yet to turn a profit, according to Alphaliner.

Based on the container segment performance extracted by Alphaliner from the third quarter results reported by parent Korea Line Corporation, SM Line contributed an ebitda loss of KRW12 billion in the third quarter, double the KRW6 billion loss the previous quarter.

Despite the negative operating results, SM Line is continuing to expand rapidly particularly in the Middle East-to-intra-Asia trades. The carrier is also said to be considering the commencement of a new Asia to US east coast route from the second quarter of 2018.

On a positive note, SM Line's liftings grew from 97,000 TEU in the second quarter to 142,000 TEU in the third quarter.

However, both South Korean carriers will face challenges ahead with shippers and counterparties in their battle to overcome the damage caused by the collapse of Hanjin and rebuild confidence in South Korea's container shipping industry.

Source : SN-TR.

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