Hanjin Shipping Sees Red Ink amid Falling Freight Rates
Image Courtesy: Hanjin ShippingSouth Korean shipping company Hanjin Shipping has been further hit by falling freight rates in the container shipping industry as the company plunged into loss during the second quarter of 2016.
The shipping firm saw its net loss at KRW 212 billion (USD 191.2 million) in the quarter, representing a significant drop from a net income of KRW 104.2 billion (USD 93.9 million) reported in the same quarter a year earlier. Furthermore, the company’s half year net loss stood at KRW 473 billion, against a net income of KRW 127.1 billion in the first half of 2015.
The sluggish container shipping industry, faced with overcapacity and low freight rates, also impacted the company’s revenues for the period as Hanjin’s quarterly revenue dropped to KRW 1.43 trillion from KRW 1.97 trillion reported in the second quarter a year earlier, while the half-year revenue stood at KRW 3 trillion, down from last year’s KRW 4.1 trillion.
During the second quarter the financially-troubled shipping major launched talks with 22 shipowners in an effort to cut charter rates, however, it failed to receive any positive response in the first round of talks.
After submitting a formal request to restructure its debt with seven lenders, led by state-run Korea Development Bank, at the beginning of May, Hanjin Shipping received approval to move forward with its corporate rehabilitation program.
World Maritime News Staff
