The South Korean ocean carrier reported operating profits in its container division fell over 73 percent year-over-year in the third quarter of 2015 despite volume growth of nearly 4 percent thanks to weak freight rates caused by overcapacity.
Hanjin Shipping posted an operating profit of 10.7 billion South Korean Won (U.S. $8 million) in the third quarter of 2015, an 81.6 percent drop from the third quarter of 2015, according to the company’s most recent financial statements.
The Seoul, South Korea-based ocean carrier reported total revenues fell 8.9 percent year-over-year to KRW 1.94 trillion (U.S. $1.66 billion) for the quarter.
Operating profits in the company’s container transport division decreased 73.2 percent to KRW 20.8 billion compared with Q3 2014, despite a 3.8 percent year-over-year increase in volumes to 1.18 million TEUs.
The company attributed the decrease primarily to falling freight rates caused by rampant overcapacity in the market.
Hanjin’s bulk business division posted an operating loss of KRW 26.6 billion in the third quarter, a 19.4 percent improvement from the KRW 33 billion loss the prior year. Other businesses segments, including the company’s terminal division, posted an operating profit that of KRW 16.5 billion, up 21.3 percent from the same 2014 period.
For the first nine months of the year, Hanjin has increased its operating profit considerably, to KRW 224.9 billion from KRW 15.8 billion in the same 2014 period, despite a decline in revenues. Cumulative revenues for the first three quarters stood at KRW 6.08 trillion, down 4.9 percent year-over-year.
Container profits grew 212.8 percent to KRW 247.4 billion compared with the first nine months of 2014 as volumes were up 1.5 percent to 3.45 million TEUs.
“We forecast profitability improvement in upcoming quarter as transport volume is expected to increase considering recovery of the U.S. economy and continuous market stabilization efforts of carriers,” Hanjin said of the results.
The company added that it is “concentrating all its efforts to maintain stable figures by carrying on various cost-saving measures and strengthening sales power.”
Hanjin container profits plummet in Q3
