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.”