Hanjin: 2008 profit up, caution about 2009

Hanjin: 2008 profit up, caution about 2009 Hanjin Shipping said it had net profit of 321.4 billion Korean won ($231.4 million) in 2008 compared to 144.3 billion won in 2007, a 123 percent increase.
   Revenue was 9.4 trillion won (nearly $6.8 billion) in 2008, about 35 percent higher than the 6.9 trillion won recorded in 2007.
   The company’s container revenue in 2008 was 7.2 trillion won ($5.2 billion), 27 percent higher than in 2007, even though container volumes were down 5.5 percent to 3.4 million TEUs. The company attributed this to increased freight rates in the transpacific route.
   The company said although implementation of a floating bunker system was able to minimize losses due to higher oil prices during the first part of 2008, operating profit in the container division declined 19 percent year over year to 89 billion won ($64 million) due to a significant drop in Asia/Europe freight rates, lower cargo volume from slowdown in the global economy and higher bunker and logistics costs.
   The company’s bulk division realized revenue of 2.18 trillion won ($1.57 billion), a 71 percent increase over 2007. Operating profit in the bulk division rose 96 percent to 246.4 billion won ($177.4 million). The company benefited from the improved situation in the dry bulk market during the earlier part of the year, increased capacity from the merger with Keoyang Shipping and higher cargo volume.
   In 2009, Hanjin said it expects further contraction in the global economy from the financial crisis, which will likely affect business conditions in the shipping industry. In the first quarter it said it expects “an additional drop in cargo volume from the prolongation of slowdown in the global economy and traditional slack season. The company will maximize efficiency of vessel operation and cost control with the aim of generating the best results in the current market situation.”
   Hanjin operates some 60 liner and tramper services around the globe transporting more than 100 million tons of cargo annually. Its fleet comprises some 200 containerships, bulk and LNG carriers.