Hanjin Shipping said it had a net loss of 638 billion South Korean won in 2012 ($587 million), compared to 823.9 billion won in 2011.
The company’s operating loss was 109.8 billion won compared to an operating loss of 512.9 billion won in 2011.
South Korea’s largest container shipping company said annual sales were 10.6 trillion won in 2012, 11.2 percent more than in 2011.
Hanjin, which also has bulk operations, moved 4,477,043 TEUs in 2012, 7.4 percent more than in 2011, and container sales were 8.7 trillion won, 14.5 percent more than in 2011.
But despite those higher volumes, Hanjin had an operating loss from container operations of 162.8 billion won, an amount that was much smaller than the 563.7 billion operating loss from containers recorded in 2011.
The company said the reduction in operating loss was due to increased container volumes and rate recovery on main service lanes.
Container freight rates have rebounded by 5.3 percent year-on-year, Hanjin said, but the container business was affected by high oil prices and “limited container freight rate recovery affected by oversupply.”
The bulk division "remained in the black due to positive operation profit in the long-term contract business,” achieving 19.2 billion won operating profit, despite an 11 percent reduction, year-on-year, in shipment volume.
Hanjin forecast that a “Supply-heavy market will persist in the container sector due to the continuation of new mega-vessel deliveries. However, the economic recovery of the U.S. and China with Europe’s financial crisis stabilizing is expected to raise the shipment volume and the carriers are to continue from last year the various supply-control strategies such as early scrapping of uneconomic vessels, continuation of slow steaming, service rationalization, idling and temporary voyage cancellation. Hence, profitability is expected to improve because of timely rate restoration by maintaining high operating rate and because of cost-reduction efforts.
“The bulk shipments are expected to increase due to global economic recovery, including China. However, the global bulk market will remain weak for the time-being due to oversupply of all vessel sizes,” Hanjin said.
“In 2013, in spite of some difficulties due to continued high oil prices and global economic uncertainties, we will ensure to achieve net profit by continuing rate recovery efforts, as well as active cost-saving, etc.,” the company said. - Chris Dupin