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Ocean carriers fared better financially in Q3 over 2016-Q3, except HMM

THE third quarter of 2017 has seen marked improvements in the financial results of shipping liners compared to the same period last year.

SeaIntel Maritime Analysis said ten of the eleven carriers that published their Q3 results recorded a positive EBIT/operating profit, with only Hyundai Merchant Marine (HMM) in the red.

In 2016-Q3 only Hapag Lloyd and Wan Hai reported positive figures of US$72 million and $10 million, respectively. In 2017-Q3 however, all the carriers except for HMM have posted positive quarterly operating results.

Danish shipping giant, Maersk Line, which reported the biggest year-on-year EBIT loss of $456 million in 2016-Q3, has made the biggest recovery with a positive EBIT of $263 million in 2017-Q3, which is also the largest y-o-y change of $416 million in 2017-Q3.

China's Cosco also made a strong recovery, turning an operating loss of $244 million in 2016-Q3 into an operating profit of $15 million in 2017-Q3.

HMM, which is the only carrier to record an operating loss of $26 million has now recorded operating losses in each of the last four third quarters (including this one). However, HMM have reduced their losses by almost $170 million year on year 2017-Q3, from an operating loss of $195 million in 2016-Q3.

Hapag Lloyd is the only carrier presenting positive operating results in third quarters of all 8 years from 2010 to 2017. MOL, which posted an operating loss in every third quarter since 2011, recorded an operating profit in 2017-Q3, of $19 million for a y-o-y change of $112 million.

Talking about the less than stellar 2017-Q3 results, SeaIntel CEO, Alan Murphy said: "While 2017-Q3 freight rates certainly were an improvement over the horrendous 2016-Q3 peak season, the improvement is just marginal, and we are still significantly below the 2011-2014 period, and just barely at the level seen in 2015.

"As we have detailed in our analysis in recent weeks, the soft freight rates have been driven by low peak season utilisation levels, as carriers have almost completely avoided blanking sailings in 2017. This in essence explains why 2017-Q3 operational returns severely underperformed carrier expectations, despite the healthy 2017-Q3 demand growth."
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