Hanjin posts operating loss of US$196 million in first quarter
SOUTH Korea's flag carrier Hanjin Shipping has posted an operating loss of KRW218.4 billion (US$196 million) due to soaring bunker prices, delayed freight rate recovery and poor performance in container shipping. Saturday, 12.May.2012, 01:20 (GMT+3)
SOUTH Korea's flag carrier Hanjin Shipping has posted an operating loss of KRW218.4 billion (US$196 million) due to soaring bunker prices, delayed freight rate recovery and poor performance in container shipping.
During the first quarter, the company recorded a 7.4 per cent year-on-year growth in transport volumes despite slow US economic recovery and European debt crisis.
But quarterly revenue was down 0.5 per cent to KRW2.26 trillion compared to the same period in 2011 due to decreased freight rates.
The company said its container business unit registered an operating loss of KRW238 billion mainly due to high bunker costs. But it said it was able to improve operating margin by attaining a year-on-year transport volume increase of 7.4 per cent, cutting down supply on non-profitable routes and raising freight rates of the transpacific and the Europe routes during the first quarter.
Its bulk unit was booming with an operating profit of KRW10.3 billion, up 27.2 per cent year on year.
In order to return to profits in the second quarter, it said: "The container business unit has rolled out plans to ensure positive turnaround by launching new routes, adapting early peak-season surcharge in addition to other freight rate increase efforts, and lowering operating costs through deployment of low-cost mega vessels, and container transport volume as well as freight rates are on the increase since March. As for the bulk business, factors such as seasonal rebound in the Chinese iron ore industry, greater demand for coal to power the approaching summer's electricity supply and southern hemisphere's harvest season are expected to bolster the cargo volume compared to 1st quarter."