10.2 C
Saturday, September 26, 2020
Home News HMM flags coronavirus concerns after loss for fifth straight year

HMM flags coronavirus concerns after loss for fifth straight year

Hyundai Merchant Marine said that the economic fallout resulting from the novel coronavirus outbreak could affect trade volumes, as the South Korean flagship carrier announced a net loss of US$511.83 million (KRW591.67 billion) for 2019.

The loss narrowed from the US$708.4 million (KRW790.56 billion) net loss in 2018.

HMM’s revenue improved by around 6%, to US$4.77 billion (KRW5.51 trillion), as the company began deploying five newly built very large crude carriers that have been committed to long-term shipping contracts with compatriot refiners GS Caltex and S-Oil Corporation.

The company said: “Revenue declined in the fourth quarter of 2019, due to bearish market condition and weakening freight rates compared to the same period a year earlier, while operating loss has largely narrowed owing to continued rationalisation of service routes as well as effective operation of five new VLCCs.

“In 2020, uncertainties stemming from the outbreak of the COVID-19, rising concerns over global economic downturn, and the impact of U.S.-China trade conflict are weakening the prospects for rises in trade volume. HMM will continue to secure global competitiveness through enhancing operational efficiency, strengthening cost-saving efforts, and establishing customer-oriented solutions.”

China prolonged the Lunar New Year holidays in a desperate move to curb the spread of the novel coronavirus that has been named COVID-19 by the World Health Organization. The bug surfaced in Wuhan in December 2019 and has spread across Asia, Europe, Australia and North America, killing more than 1,100 people and infecting nearly 60,000 others.

As liner operators have reduced sailings to and from China, 6 million TEU of container shipments are estimated to be affected.

HMM will take delivery of a dozen 24,000 TEU container ships from Daewoo Shipbuilding & Marine Engineering and Samsung Heavy Industries from April, as the company becomes part of THE Alliance.

The company is now controlled by its banks after a debt-for-equity swap in 2016, but profitability has been elusive.

HMM said: “HMM will focus on increasing profitability by providing differentiated value-added services and improving its business structure through managerial innovation including its full commitment to digital transformation.”

Martina Li
Asia Corespondent

- Advertisment - LR Sustainability Decarbonisation Digital Adverts

Latest Posts

Pitch perfect, curbing energy wastage at sea

As the maritime sector enters a period of transformation to a zero carbon future the onus will be on owners to find mitigating technologies...

Hapag-Lloyd invests in LNG retrofit

German vessel operator Hapag-Lloyd is converting a former UASC ship, the 15,000TEU Sajir, to operate on LNG fuel. Hapag-Lloyd said that using LNG compared to...

Lines argue FMC has no jurisdiction in chassis dispute

The world’s biggest shipping lines have filed a motion to dismiss a US$1.8 billion complaint about equipment use in the US on the grounds...

DP World Australia expects to resolve dockers dispute

Dock workers in Port Botany, Sydney Australia, are expected to reach a negotiated agreement to their dispute with DP World Australia (DPWA) following a...

“Abraham Accords” leads to market buoyancy in Middle East

Maersk Line, the world's largest container shipping carrier, will start to ship boxes between Israel and United Arab Emirates (UAE), as the two countries...