Hanjin Shipping sees profit drop 66% in 2007

Hanjin Shipping sees profit drop 66% in 2007 Net income at Hanjin Shipping, South Korea's largest shipping company, dropped 66.4 percent to 145.7 billion won ($154.5 million) in 2007, compared to 460.4 billion won in 2006.
   Hanjin's 2006 result was boosted by the sale of 40 percent of its terminal assets, covering Taiwan, Japan and the United States, to Australia's Macquarie Bank for about $870 million.
   The Seoul-based carrier said its earnings before interest and taxes (EBIT) in 2007 increased 58.2 percent to 235.9 billion ($250.1 million) from 149.1 billion won. The operating income rise was achieved despite 'unfavorable conditions such as the deterioration of profitability in Asia-U.S. business, rapid hike in fuel prices and logistics expenses,' the company said in a statement.
   Hanjin's revenue in 2007 was 6.94 trillion won ($7.35 billion), up 14.6 percent from 6.05 trillion won in 2006. 'Such gain in total sales was the result of the expansion of container fleet in the European, Mediterranean and Middle East services as well as the intensive growth of bulk business caused by the boost of dry bulk market,' the company said.
   Container sales last year increased 9.4 percent to 5.66 trillion won ($6 billion) as Hanjin moved an extra 10.7 percent boxes globally to 3.62 million TEUs.
   Revenue from bulk shipping jumped 45.4 percent to 1.28 trillion won ($1.35 billion) despite 10.6 percent lower volume of 36.7 million tons. 'The rise in total sales for bulk despite of the decrease in its transported volume was caused by the growth in the chartering business,' the company explained.
   Looking ahead, Hanjin is targeting total sales (based on exchange rate of $1=900 won) of 7.34 trillion ($8.2 billion) and EBIT of 459.4 billion won ($510.5 million). To reach those goals, the company aims to transport 3.66 million TEUs and 37 million tons of bulk cargo, both of which represent 1 percent increases over last year.
   As part of its 2008 business strategy, Hanjin said it would invest 1.2 trillion won ($1.33 billion) in mega vessels of more than 10,000 TEUs, major container terminals around the world, container equipment and third-party logistics business.
   The company will also open its first ship repair yard in China at the end of this year.