South Korea’s leading shipper Hyundai Merchant Marine Co. is expected to return to profit from the third quarter, on the back of its full membership in a major shipping alliance and deployment of more efficient ultra-large container ships, its chief executive said Tuesday.

“The third quarter is traditionally a bumper season for the shipping industry,” Hyundai Merchant CEO Bae Jae-hoon said in his first press conference since taking office last March. “As long as there are no big changes in market conditions, we expect a turnaround in the third quarter.”

Korea’s biggest shipping company by sales has been in the red since the second quarter of 2015 despite aggressive self-rescue plans and massive financial support from the government. According to its regulatory filing as of July-September 2019, debt ratio is 858 percent, with a total debt of 6.13 trillion ($5.26 billion) on assets of 714.1 billion won.

Bae said the company is also aiming to bump up 2020 sales by 25 percent from the previous year. Sales in 2019 are expected to be similar to the previous year`s 5.22 trillion won. Sales in the first three quarters came to 4.16 trillion won.

In April, Hyundai Merchant is set to join THE Alliance, one of the world’s three main vessel-sharing agreements, under a 10-year partnership. Its membership in 2M Alliance, another major ocean alliance, is to expire in March.

“Unlike in the 2M Alliance, we would have a more equal say in THE Alliance so that we can play a more proactive role,” Bae said.

From the second quarter, it will also start operating 12 container ships of 24,000-TEU, or twenty-foot equivalent, capacity on routes connecting Asia and Europe. The ultra-large vessels consume only half the fuel of their 10-year-older peers, which would help with profitability, the company said. The vessels were state-funded by Korea Development Bank and Korea Ocean Business Corp.

Hyundai Merchant would also undergo a name change. Bae said the company would decide on a new name in February and seek approval from the board and shareholders.

Since the surprise collapse of Korea`s No. 1 shipper Hanjin Shipping in 2017, the government has been grooming Hyundai Merchant as the country’s next leading sea carrier.

By Noh Hyun, Choi Keun-do and Kim Hyo-jin

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