[151113.EN.SEA] Hanjin Quarterly Loss Widens To US$297 Million As Revenue Slips 7.2pc

KOREA's Hanjin Shipping has announced a third quarter net loss of KRW 317.6 billion (US$297.26 million), far worse than the loss of KRW47.3 billion recorded in the same quarter the previous year.

The company attributed the widening loss to a foreign currency exchange loss of KRW 174.3 billion from appreciation of the Korean won against the US dollar.

Third quarter revenue fell 7.2 per cent year-on-year to KRW2.71 trillion.

Three days before the release of the company's results, CEO Kim Young Min announced his resignation, taking responsibility for two consecutive years of losses and delays in securing financial support from creditors.

Mr Kim, who was appointed as CEO in January 2009, will remain at the helm until a replacement is found. His term was to end in March 2015.

 

The container division posted a third quarter operating loss of KRW47.8 billion mainly due to oversupply and delayed freight rate recovery despite 4.3 per cent more volumes on the transpacific and 6.4 per cent more in Asia-Europe volumes year on year.

Revenue from the container division amounted to KRW2.2 trillion, an increase of 1.4 per cent compared to the second quarter as total box volume grew 5.8 per cent year-on-year.

"Container shipping market is still facing difficulties mainly due to over-supply situation," said a company statement.

"However, with holiday season approaching and continuous eco-steaming, vessel idling, service rationalisation and rate restoration by global carriers, container freight rates are expected to stabilise gradually," it said.

The bulk division achieved an operating profit of KRW8.9 billion, an increase of 394.4 per cent year on year as freight rates surged by 11 per cent compared to the third quarter of 2012. Revenues were up 4.4 per cent year on year due to bulk freight rate recovery.

"As for bulk business, cargo volume is likely to recover in the fourth quarter with growing demand for crops in the US and Russia as well as demand for heating and stock piling in winter season," the company said.

Source : HKSG.