Hyundai Merchant Marine Rebuts Negative Drewry Report
Hyundai Merchant Marine said it expects to return to profitability after a long interval of operating losses.
In response to a negative report on South Korean shipping lines last week by Drewry Maritime Research, South Korea’s second-largest carrier said it is working through various avenues to improve its financial position.
“Reports were prematurely conceived and greatly exaggerated,” Lamont Petersen, vice president of marketing with HMM in Dallas, said of the Drewry report.
HMM said in a statement that investors have signaled their confidence in the company’s future, as shown by the fact that “recently released asset-backed shares were quickly snapped up on the Korean stock exchange, which gave a boost of $140 million to the company’s balance sheet.”
The company said the share price of Hyundai stock has more than doubled in just the last two months. “Additional new HMM common shares will soon be released as well, the sale of which is expected to boost their bank balance by $1 billion,” the ocean carrier said.
HMM swung back into the black in the second quarter of 2013 from a loss a year earlier, logging a profit for the first time in 10 quarters.
Net profit reached $28.3 million in the April-June period, compared with a loss of $144 million a year earlier, the company said last month in a regulatory filing.
The shipping line said container shipping is expected to recover in the third quarter of the year, with its bulk-carrier business expected to rebound on a series of shipping deals
The repayment of deposit monies to HMM from the failed merger attempt with Hyundai Construction last year also had a positive impact on the shipping company’s cash reserves.
HMM said the return to profitability was “driven by intelligent management of capital and assets, reductions in operating expenses and improving rate levels in some trade lanes.”