Written by Bloomberg
STX Pan Ocean Co., South Korea’s largest bulk-shipping line, pared its second-quarter loss as a global economic recovery and Chinese growth spurred demand for shipments of coal and iron-ore.
Net loss narrowed to US$2.6 million ($3.54 million) from US$35.9 million a year earlier, the Seoul-based shipping line said in a statement to the Singapore stock exchange today, citing international accounting standards. The company also announced plans to buy its first offshore vessels.
The shipping line’s second-quarter sales jumped 90% to US$1.5 billion as Chinese demand for iron ore boosted freight rates. Mitsui O.S.K. Lines and Nippon Yusen K.K., Japan’s two biggest shipping lines, also reported improved earnings in the period.
“Bulk-shipping rates improved quickly from a year earlier on Chinese demand,” said Jee Heon Seok, an analyst at NH Investment & Securities Co. in Seoul. “I expect the cargo demand to be stable, although additional capacity coming into the market may damp improvements in rates.”
STX Pan Ocean’s operating profit, or sales minus the cost of goods sold and administrative expenses, was US$35.1 million in the quarter, compared with a $64.9 million loss a year earlier, the company said.
The shipping line fell 2.5% to close at 11,750 won in Seoul trading before the earnings announcement.
The company will spend US$160 million on the three platform supply vessels to diversify its business, according to a separate filing to the Singapore stock exchange today. The ships will be delivered in 2012 and 2013.
Under Korean accounting standards, the company posted a second-quarter profit of 503 million won ($572,166), compared with a loss of 39.4 billion won a year earlier.
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