Korea's Hanjin Shipping posted a 37.2 per cent year-on-year reduction in first quarter operating losses to KRW62.2 billion (US$58.1 million), drawn on revenues of KRW2.15 trillion, down 7.6 per cent, according to Shipping Gazette.
Box volume was up 0.7 per cent year on year, but freight rates fell two per cent, resulting in a 6.4 per cent fall in container revenue to KRW 1.93 trillion. This meant operating losses of KRW35.8 billion due to soft demand, despite 23.1 per cent savings in fuel.
"Although deliveries of mega vessels are being made in container market, carriers are continuing service rationalisation, slow steaming, early return of chartered-in vessels and scrapping old vessels, thus profitability is expected to improve," said a Hanjin statement.
"Rate increases during the peak season and stable oil price are likely to contribute to profitability. Global bulk volume is expected to rise due to recovery of Chinese construction, resumption of Columbian coal exports, etc," said the company.
The bulk unit's revenues were 0.5 per cent lower at KRW171.8 billion year on year due to 8.1 per cent decrease in freight volume, even-though bulk freight rates rose 5.8 per cent and benefited from a 7.6 per cent drop in fuel costs.
"Operating profit is expected to improve from second quarter as continuous rate restoration and cost-cutting efforts since second half of last year show full effect," said the company.
Box volume was up 0.7 per cent year on year, but freight rates fell two per cent, resulting in a 6.4 per cent fall in container revenue to KRW 1.93 trillion. This meant operating losses of KRW35.8 billion due to soft demand, despite 23.1 per cent savings in fuel.
"Although deliveries of mega vessels are being made in container market, carriers are continuing service rationalisation, slow steaming, early return of chartered-in vessels and scrapping old vessels, thus profitability is expected to improve," said a Hanjin statement.
"Rate increases during the peak season and stable oil price are likely to contribute to profitability. Global bulk volume is expected to rise due to recovery of Chinese construction, resumption of Columbian coal exports, etc," said the company.
The bulk unit's revenues were 0.5 per cent lower at KRW171.8 billion year on year due to 8.1 per cent decrease in freight volume, even-though bulk freight rates rose 5.8 per cent and benefited from a 7.6 per cent drop in fuel costs.
"Operating profit is expected to improve from second quarter as continuous rate restoration and cost-cutting efforts since second half of last year show full effect," said the company.