South Korea’s Hyundai Merchant Marine said its loss narrowed sharply in 2016 from a year earlier largely due to gains from asset sales, but added it would continue to register losses until the middle of 2018.
Net loss for the country’s largest ocean box liner came to KRW4.4 billion (US$3.84 million) last year compared to a loss of KRW627 billion a year earlier, the company said in a regulatory filing.
Operating loss widened to KRW833 billion from KRW279 billion over the cited period due to low freight rates, it said.
Sales also fell 18.8% year-on-year to KRW4.58 trillion from KRW5.65 trillion, it said.
“Low global trade and freight rates were behind the widening operating losses,” the shipping line said, as quoted by Yonhap News.
During the fourth quarter, the shipping firm logged an operating loss of KRW186 billion on sales of KRW1.27 trillion.
The company said it will expand its business network, while seeking to beef up its competitiveness.
It added that it anticipates continued losses until the first half of 2018 as the container shipping industry attempts to recover from Hanjin Shipping’s bankruptcy and years of excess capacity.
This year will be spent strengthening its financials as it hopes to start registering an operating profit in the third quarter of next year when overcapacity in the market is expected to ease, said the carrier.
To return to profit, Hyundai Merchant told media it has started discussions on investing in box terminals in Southeast Asia. Once the company begins to make profit, it plans to order new ships to meet new emission rules scheduled to take effect at the end of the decade.
Photo: hh oldman
