Hanjin Shipping back in black

Seoul: Hanjin Shipping announced 2010 1Q business results with total sales of US$1.638bn and operating profit of US$2.2m.
 
Hanjin Shipping explained, "Even though the first quarter is traditionally a slack season, the cargo volume jumped by 30.1% YoY with 32.9% increase in total sales. Especially, the container division saw 38.8% upturn in sales (US$1.356bn) mainly due to the recovering global economy, which resulted in the sharp rise in cargo volume and rates of the company's major trades including the transpacific and Asia-Europe. For bulk division, its sales rose by 13.1% recording US$327m owing to the improved profitability of time charter business of small/medium sized vessels."
 
The company commented that despite the recovered cargo volume and rates of Asia-Europe trade, the container division experienced operating loss of US$8m due to an insufficient rate increase in the transpacific trade and the costs caused by laying up vessels during the slack season.
 
On the other hand, the bulk division was able to return to black in operating profit recording US$10m thanks to the improved profitability of time charter business of small/medium sized vessels in spite of some decline in revenue after returning the chartered vessels.
 
Hanjin Shipping added, "In the 2nd quarter, for the container market, we expect vessel supply to increase along with the delivery of mega-sized vessels and redeployment of laid-up ships. However, we also expect our operating profit to continue to improve owing to the recovering global economy leading the growth in cargo volume during the traditional peak season, rate recovery in the transpacific trade and our extensive efforts to reduce costs.
 
"In case of the bulk market, we believe the demand for mega-sized vessels will slow down as China is delaying the pricing of iron ore while the demand for small/medium sized ships will grow as the transport of raw materials is expected to boost." [10/05/10]