Hanjin Shipping reported a net loss of 432.8 billion won (about US$404.9 million) from January to September, versus a net loss of 386.9 billion won in the same period last year.
The container line said in August, when it reported its earnings for the first half of 2013, that it had achieved a “remarkable” improvement in the first half of 2013. It narrowed its loss in the first quarter, but year-over-year comparisons worsened in the second quarter.
In the third quarter, the company posted a net loss of 317.6 billion won, compared with a net loss of 47.3 billion won in the same period last year. The carrier said the net loss resulted from a foreign currency translation loss of 174.3 billion won, from appreciation of the won against the U.S. dollar, “which is not related with actual cash flow.”
Year-to-date revenue for Hanjin, the world’s eighth largest container line by global capacity, was also down, totaling 7.9 trillion won, a decrease of 1.8 percent year-over-year. Revenue from January to September included a 1.8 percent decline in container revenue, which accounted for 6.5 trillion won. The drop was partially driven by a decline in total revenue in the third quarter of 7.2 percent year-over-year, including a 9.4 percent slide in container revenue, which accounted for 2.2 trillion won.
However, quarterly and year-to-date container volumes were up year-over-year. Quarterly traffic totaled 1.23 million 20-foot-equivalent units, increasing 5.8 percent, and year-to-date volume reached 3.55 million TEUs, rising 6.9 percent.
Although Hanjin’s container volume in its trans-Pacific and Asia-to-Europe routes increased 4.3 percent and 6.4 percent year-over-year respectively, the container division recorded an operating loss of 47.8 billion won mainly because of “oversupply in main service routes during the peak season and delayed freight rate recovery,” according to the company. Hanjin has announced that it intends to leave the Port of Portland, Ore., to cut costs.
“Container shipping market is still facing difficulties mainly due to oversupply situation,” Hanjin said in a written statement. “However, with holiday season approaching and continuous eco-steaming, vessel-idling, service rationalization and rate restoration by global carriers, container freight rates are expected to stabilize gradually. We will also concentrate on recovering freight rates with all possible cost reduction measures in order to improve operating margin.”
Hanjin’s president and CEO, Young Min Kim, resigned this week, saying he was taking responsibility for the company’s continuing losses. Hanjin recently announced plans to receive a loan of 150 billion won from Korean Air, one of its major shareholders, to overcome its liquidity problems.