According to MANA,Falling freight rates, starting from the fourth quarter of last year, amid the supply and demand imbalance, affected Hanjin Shipping's first-quarter performance, the company said in a statement. Sales fell 25.1% year on year to Won1.59trn, the company said, citing its consolidated financial statement.
Sales at its container shipping division, which accounted for around 93% of total sales in the first quarter, dropped 24.8% from a year earlier to Won1.48trn. Sales at Hanjin's bulk business tumbled 32.7% year on year to Won94bn in the first three months of 2016.
Hanjin Shipping moved 1.8% fewer containers, at 1.09m teu in the first quarter from 1.10m teu in the same three-month period a year earlier.
Hanjin Shipping said it incurred an operating loss of Won115.7bn in the first quarter of this year from an operating profit of Won139.8bn in the same three-month period last year. Its container division posted an operating loss of Won88.5bn in the first quarter from a year-earlier operating profit of Won163.9bn.
Container freight rates are slowly recovering as the annual peak season begins in the second quarter, Hanjin Shipping said. In the bulk market, the carrier said, demolition of vessels is likely to mitigate oversupply, which will improve current conditions.
On May 4, Hanjin Shipping said its creditor banks had approved its proposal for a voluntary restructuring agreement, a move that is expected to hasten efforts to normalise its business. The approval from its creditor banks came after the carrier disclosed details of a liquidity plan that aims to raise Won411.2bn.
The Korean shipping line is part of the newly formed shipping group covering all east-west trade lanes dubbed THE Alliance. Unveiled on May 13, it includes Hapag-Lloyd, Japanese lines Mitsui OSK Lines, NYK Line and K Line and Taiwan's Yang Ming Marine. THE Alliance is scheduled to start in April 2017, after regulatory approvals