Korea's shipping giants stuck in interest slump

Hanjin Shipping and Hyundai Merchant Marine are weighed down by massive interest burdens, several years of deficits, and with zero prospects of becoming profitable within the next three years, says Drewry.

Photo: Hyundai Merchant Marine

Neither Hanjin Shipping nor Hyundai Merchant Marine (HMM), South Korea's two major shipping conglomerates, have any prospects of turning a profit anytime soon. Their financial states are far too weak, according to a new analysis by Drewry Equity Research.

Hanjin has presented disappointing financial results since 2011, and in spite of the management's current attempts to rationalize and cut costs in hopes of a 2014 turnaround, Drewy does not expect Hanjin to become profitable within the next three years. The carrier's interest costs, which grew 168 percent between 2008 and 2013, put pressure on bottom lines and the carrier's capital base.

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