The operating environment in 2014 was comparatively less harsh for some global ocean liner owners, as shown by their annual financial statements.
The container division of Hanjin Shipping said total sales slid but operating profit climbed up to black in 2014 after a three-year stagnation.
The South Korean company achieved total sales of KRW7.8 trillion (US$7.074 billion) in 2014, which fell 7.5% year-on-year because of decrease in transported cargo volume.
However, annual operating profit recorded black with KRW143.5 billion, which started with KRW 37.5 billion in the second quarter, KRW77.4 billion in the third and KRW64.4 billion even in the traditionally slow fourth quarter.
The improved container division numbers were achieved with “active rate restoration efforts and cost-saving measures,” such as rationalization of unprofitable services and liquidation of low-efficiency vessels. The continuous fall of oil prices also helped, said the conglomerate.
Annual total sales last year reached KRW8.7 trillion, while operating profit amounted to KRW82.1 billion. “Total sales fell 10.3% year-on-year as a result of supply decrease as the carried discarded inefficient vessels, but operating profit has recorded black after continuous loss since 2011,” said the company.
Hanjin Shipping forecast that “with continued economic growth of the U.S. market and positive influence of ECB’s quantitative easing, container shipping market, especially the East-West trade, is likely to stabilize.”
It added that the impact of falling oil prices will be felt more intensely from the first quarter of 2015, “and we expect improvements in business results to continue this year as cost structure improvement actions have secured our cost competitiveness.”
OOCL’s 2014 revenue, volume expand
On the other hand, Hong Kong exchange-listed Orient Overseas (International) Limited, mother company of Orient Overseas Container Line, said OOCL volumes in the fourth quarter of 2014 went down 2.6% from the same period last year.
Total revenues for the period decreased by 0.2% to US$1.398 billion, and loadable capacity decreased by 1.3%. The overall load factor was 1% lower than the same period in 2013. But overall average revenue per twenty-foot equivalent unit (TEU) increased by 2.5% compared to the fourth quarter of last year.
For the full year of 2014 ended December 31, 2014, total volumes increased by 5.5% over the same period last year and total revenues recorded a 3.5% growth. Loadable capacity increased by 1.4%. The overall load factor was 3% higher than the same period in 2013. Overall average revenue per TEU decreased by 1.9% compared to the same period last year.
‘K’ Line doubles profit
For Kawasaki Kisen Kaisha (“K” Line), meanwhile, the Japanese ship operator said net profit in the first nine months of its fiscal year 2015 ending March 31, 2015 more than doubled to JPY33 billion (US$273.8 billion).
“K” Line reported a 110.1% jump in net profit for the first three quarters of the financial year 2015. Revenues increased by 10.6% for the nine-month period to JPY1.02 trillion, compared to JPY918 billion a year earlier.
The more than doubling of profits came despite a mixed operating environment for shipping, a result of a further restoration of freight rates in Japan-North America routes and cost cutting in the container ship business. The depreciation of the yen against the U.S. dollar and the falling price of fuel oil also contributed to the improvement of the profit.
“K” Line also upped its annual profit forecast although this is still below its nine-month profit level, implying it expects a loss in the fourth quarter. It increased its annual profit forecast by 16.3% to JPY25 billion.
Photo: Chuck Taylor
