Hanjin Shipping announced this year’s Q3 08 business results with KRW 2.56 trillion in total sales and KRW 77.9 billion in operating profit.

Total sales of KRW 2.56 trillion in Q3 increased 13.8% compared to 2Q 08 as a result of an increase in container revenue rates, fleet expansion, and a weaker Korean won for the US dollar denominated revenue. Container division benefited from higher rates from Asia to North America achieving total sales of KRW 1.94 trillion, up 12.8% from 2Q 08, while bulk division realized KRW 614.2 billion, up 17.3%, through synergy effect from the merger with Keoyang Shipping earlier this year, leading to larger fleet in control and higher cargo volume.

Despite the successful implementation of floating bunker surcharge system in the Asia-North America trade, container division posted KRW 4.7 billion loss in operating profit, compared to KRW 22.8 billion gain in 2Q 08, due to a substantial drop in rates from Asia to Europe and an increase in cost due to higher oil prices and logistics expenses.

On the other hand, bulk division achieved KRW 82.6 billion gain in operating profit due to the growth in the dry bulk market extending into 3Q 08 and the merger effect with Keoyang Shippping. Overall, Hanjin Shipping recorded total operating profit of KRW 77.9 billion, down KRW 25 billion from 2Q 08.

3Q results included higher non-operating expenses owing to the rise in USDKRW exchange rate for the US dollar denominated liabilities, showing significant translation losses and resulting in KRW 283.7 billion loss in net profit.

Hanjin Shipping is concerned over 4Q 08’s performance due to recent changes in the bulk market conditions. Nevertheless, the company plans to maintain profitability by having secured long-term cargo contracts and chartering out the available bulk vessels. Similarly, container division will implement various cost savings strategies in order to prepare for a cargo drop during the economic downturn.