South Korean shipping giant Hyundai Merchant Marine (HMM) has managed to reduce its half-year loss in 2019 by over 40 percent, despite challenging market conditions and a deteriorating geopolitical situation.
The company said the reduction was achieved through the improvement of its cost structure by rationalizing the service network and enhancing operation efficiency.
The operating loss for the first half of 2019 was KRW 218.5 billion (USD 180 million), 40.9 percent less than the 369.9 billion (USD 304.3 million) from the first half of 2018.
Revenues during the first six months of the year rose to KRW 2.7 trillion (USD 2.2 billion), 15.4 percent more than the 2.3 trillion (USD 1.9 billion) achieved in the same period a year before.
HMM said the result was achieved despite the negative impacts caused by high bunker costs, the U.S.-China trade conflict and a delay in freight rate recovery. The company also noted that the recovery of the market situation in the second quarter of 2019 has been obstructed by an oversupplied market and escalating tension in the Middle East.
“Volume increase is expected during the peak season, but global trade uncertainty will persist, attributed to the U.S.-China trade conflict, instability in the Middle East, Brexit and most recently, growing political and trade concern between South Korea and Japan,” HMM said.
The company is also set to join THE Alliance as a full member from April 2020, obtaining competitive cost structures through joint operation. HMM would join Hapag-Lloyd, Ocean Network Express, and Yang Ming with its 23,000 TEU newbuildings.