Hanjin Shipping said Tuesday that it had a net loss of 680.2 billion South Korean won ($631 million) and an operating loss of 242.4 billion won ($225 million) in 2013 compared to a net loss of 638 billion won and operating loss of 109.8 billion won in 2012.
Sales in 2013 amounted to 10.3 trillion won ($9.6 billion) compared to 10.59 trillion won in 2012.
The company’s container business was the cause of the operating loss. Hanjin's container business had an operating loss of 316.9 won billion in 2013, which was partially offset by an operating profit of 9.3 billion won by its bulk operation and a 65.2 billion won operating profit by its terminal business. In its terminal business, it mentioned contributions from Hanjin Newport Co. Ltd. in Pusan and TTI Algeciras in Spain.
Hanjin said while it carried 4,747,698 TEU last year, a 6-percent increase over 2012, “their freight rate fell 6.5 percent, year-on-year.” It attributed the freight rate drop to an oversupply of container vessels.
However, the company foresees an improvement in the shipping industry this year.
“Oversupply in 2014 is expected due to the continuous deliveries of new mega size vessels. However, the carriers will push harder for improvements in profitability. Therefore, shipping industry will gradually start to stabilize," the company said.
In bulk shipping, it said freight rates are forecast “to recover gradually as demand rises with the approach of China’s construction season in spring and South America’s crop harvesting season in the second quarter.
“In order to overcome the liquidity issue that continued throughout last year, we will faithfully execute the financial improvement and achieve operating profit this year,” Hanjin said.
In December, Hanjin announced a major “financial improvement plan.”
Last month, Hanjin also announced a plan to spin off 76 percent of its bulk business
to Hahn &Co. and form a joint venture.