[290114.EN.SEA] Hanjin Blames US$631 Million 2013 Loss On Low Rates And Overcapacity

HANJIN Shipping has posted a net loss of KRW680.2 billion (US$635.7 million) for 2013 dragged down by falling freight rates and overcapacity in the liner trades, despite six per cent higher container volumes.

The result pushes the South Korean carrier deeper into the red, after recording a loss of KRW638 billion in 2012. Last year's result also includes a foreign exchange loss of KRW52.1 billion due to appreciation of the Korean won against the US dollar.

Total revenue in 2013 amounted to KRW10.3 trillion due to growth in both container and bulk transport volume on the back of a gradual global economic recovery.

The company reported an operating loss of KRW242.4 billion under the influence of falling freight rates owing to the oversupply of container vessels.

The container division recorded six per cent annual growth in transport volume, but freight rates fell 6.5 per cent year on year, and the unit ended the year with an operating loss of KRW316.9 billion, a company statement said.

Hanjin's smaller units, its bulk and terminal divisions, both posted modest profits for the year.

The bulk division remained in the black, after transport volume grew 2.6 per cent compared to 2012 and achieved an operating profit of KRW9.3 billion. The terminal business turned in an operating profit of KRW65.2 billion, up 92.9 per cent year on year.

"Oversupply in 2014 market is expected due to the continuous deliveries of new mega size vessels. However, the carriers will push harder for improvements in profitability. Therefore shipping industry will gradually start to stabilise," said the company.

Source : HKSG.