Top ten shipping firms lose 620 billion won

The overwhelming majority of domestic shipping companies saw huge deficits due to massive interest payments and exchange rates losses last year. Only three corporations enjoyed profitability.

According to the financial balance sheets of surveyed shipping companies, 36 shipping companies wrote off 659.9 billion won in net losses, though they earned 16.81 trillion won in total sales. Total sales of Korean shipping companies in 1999 recorded 15.19 trillion won and net incomes marked 601.3 billion won. However, even though total sales increased by 10.6% in 2000, net incomes turned into net losses in 2000 largely due to the won's depreciation.

In the midst of that, the top ten shipping companies' sales came to 15.39 trillion won, or 91.6% of total sales for the 36 shipping companies' in the industry. Net losses from the ten companies marked 619.1 billion won, or 93.8% of all losses.

Hyundai Merchant Marine ranked first with 5.19 trillion won in total sales in 2000 and Hanjin Shipping followed with 4.27 trillion won. Pan Ocean Shipping occupied third place with 1.65 trillion won in sales. SK Shipping and ChoYang posted 1.42 trillion won and 1.06 trillion won, respectively. In sixth place, Korea Line's sales stood at 549.5 billion won, while Heung-A Shipping took seventh with 369.9 billion won. The Korea Maritime Transportation Corporation (KMTC) came in eighth with 343.8 billion won, and Keoyang Shipping posted 296.4 billion won for ninth. Tenth place was taken by Dongnama Shipping with 248.2 billion won.

Among the companies, the KMTC, Dongnama Shipping and ChoYang remained profitable with 2.6 billion won, 3.5 billion won and 4 billion won, respectively. The total profit of the three shipping companies marked 10.1 billion won.

On the other hand, HMM showed a huge net loss of 310.4 billion won, and Hanjin Shipping lost 74.4 billion won. Pan Ocean Shipping went 41.5 billion won into the red and SK shipping sank for 80.1 billion won. Korea Line, Heung-A Shipping and Keoyang Line all lost money, with 73.5 billion won, 20 billion won and 29.3 billion won in net losses, respectively. Operating profits, however, jumped over last year. HMM marked 457.8 billion won, Hanjin Shipping posted 400.5 billion won and SK Shipping 104.7 billion won. Pan Ocean Line and Korea Line also posted increased operating incomes over last year with 46.7 billion won and 62.5 billion won.

In spite of these growing sales amounts and operating profits, most shipping companies suffered from sizable deficits in 2000 due to snowballing non-operating sales expenses. The companies pointed out that interest payments were the major hindrance among non-operating expenses. For instance, HMM paid 454.7 billion won in interest in 2000;
Hanjin Shipping and Pan Ocean Line also spent 294.7 billion won and 65.8 billion won on interest payments for the year. In addition, currency exchange rates also contributed to deficits. At the end of the day, HMM came out minus 349.9 billion won, Hanjin Shipping minus 268.1 billion won, and Pan Ocean shipping minus 65.8 billion won.