Shipping industry bewitched by foreign exchange losses

Foreign exchange losses have been troubling the shipping industry.

According to sources in the shipping industry, the leading shipping companies, including Hyundai Merchant Marine and Hanjin Shipping, recorded negative net profits, even though sales and operating incomes increased in the first half of this year, over and above last year when record highs were recorded.

During the January to June period, HMM raised 273.6 billion won in operating incomes, a 17% growth from last year, and 2.928 trillion won in sales. However, it marked a 54.2 billion won loss under the won's depreciation last year, and followed with a 73.6 billion won dip into the red in the first half this year.

Another major Korean shipping company, Hanjin Shipping, also posted 2.468 trillion won in sales, a 20.5% growth for the first half this year, and 207.4 billion won in operating incomes, an increase of 42.6% from the same period of last year. But, it also recorded 56.4 billion won in losses.

Korea Line, also, showed an 18.8 billion won loss during the first half this year, though it pulled in 48.5 billion won in sales, a 93% increase compared to the equivalent period of last year.

A shipping company official predicted, "Though the gap separating us from profitability is narrowing in the second half this year as compared to the first half, it is doubtful that financial budgets will improve because overseas financial markets, such as Argentina and Turkey, may weaken the won."