Hanjin Shipping announces 2Q 2009 business results

Hanjin Shipping announced today 2Q 2009 business results with total sales of USD 1.29 billion, operating loss of USD 223 million and net loss of 325 million.

Despite the loss in operating and net profit, the company is relieved to see a ray of light in the container transport volume, which jumped 22.7% QoQ, contributing to 2.5% increase in total sales of USD 1.29 billion. Hanjin Shipping believes that the container liner business will finally start to pick up driven by the recovery in the global economy. 

On the other hand, bulk liner business experienced some drop in total sales, down from USD 289 million to USD 227 million due to downsized fleet and reduced volume accompanied by declining rates. 

Hanjin Shipping commented that the downward freight rates in the Trans Pacific trade attributed to its operating loss of USD 200 million for the container liner business while the lower profitability of chartered vessels affected by the downturn of the bulk shipping industry led to an operating loss of USD 23 million for the bulk liner business this quarter. 

Moreover, Hanjin Shipping explains that the net loss was added by the expenses that had occurred during the close-down of the company’s former German affiliate, Senator Lines, early this year and the loss made by its subsidiaries.
 
Outlook for the rest of the year  

According to Hanjin Shipping, the company has been trying to secure equity in preparation for future. Despite the various signals indicating the recovery in the global economy, the company believes that the actual recovery in the shipping industry will take some time. 
In this regard, Hanjin Shipping has been putting a lot of efforts in securing equity through various measures including rights issue. Hanjin Shipping had also participated in the fund raised by KAMCO (Korea Asset Management Corporation), which made significant contribution to securing the company’s future financial needs.

In addition to these measures, Hanjin Shipping has been carrying on company-wide efforts for some time to minimize costs by restructuring its routes, lowering chartering rates, logistics expenses and renegotiating vessel deliveries and more. 

Hanjin Shipping is optimistic about the upcoming season as it foresees the container division to benefit from the continuing recovery in the global economy and higher demand during the seasonal peak season. The container carriers are also expected to improve profitability as a whole with attempts to recover the previous freight level. Furthermore, in light of the increased raw material imports by China and higher production rates in steel manufacturers, the bulk division forecasts a higher volume next quarter.

(Source: Transport Weekly)