HMM enjoys another quarter in the black thanks to higher rates
SOUTH Korea's major carrier HMM recorded a net profit of US$21million in the third quarter, turning around a loss of $103 million the same period last year, making it the second consecutive profitable quarter for the carrier after a run of 21 quarters of losses, running up billions of dollars of debt and bringing it close to bankruptcy in 2016
18 November 2020 - 19:00
The state-backed carrier remains in the red for the year, with a nine-month loss of $10 million. However, given market conditions in the current quarter, HMM is expected to celebrate its first annual profit in five years.
Revenue came in 19 per cent higher, at $1.43 billion, as the carrier benefited from higher freight rates, despite HMM's liftings falling 2.8 per cent to 1.04 million TEU, reports The Loadstar of UK.
Moreover, in contrast to many of its peers, HMM has a higher percentage of cargo booked on an FAK or spot basis, for which market rates have soared far above the level of the contract business carried by competitors.
'Although the fourth quarter is normally the traditional slack season for the container sector, container transported volumes are expected to remain strong, as retailers in the US and Europe continue to replenish inventories ahead of the year-end holidays and Chinese New Year,' said HMM.
However, HMM said there were threats from the second wave of the pandemic and trade tensions between the US and China that could derail its positive outlook.
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