Hanjin posts record quarterly sales on port, overseas logistics growth

Hanjin posted its highest-ever quarterly sales in the third quarter of this year, driven by rising cargo volumes at its port terminals and growth in its overseas logistics operations. Operating profit also improved from both the year-earlier period and the previous quarter, though cumulative operating profit for the first nine months of the year remained below last year's level.

Hanjin disclosed Monday that its consolidated third-quarter sales reached 889.8 billion won ($665 million), up 11.3 percent from a year earlier — the largest quarterly sales figure in the company's history. Operating profit for the same period rose 5.8 percent to 32.6 billion won.

Earnings also improved from the second quarter. Third-quarter sales were up 3.0 percent from the second quarter's 864.1 billion won, while operating profit climbed 9.4 percent from 29.8 billion won.

By business segment, port handling and global logistics led the growth. Increased cargo throughput at Incheon and Pyeongtaek ports lifted results in the port handling division, while overseas subsidiaries in the United States, Hong Kong and Vietnam all reported strong performance.

The global business segment improved its profitability on the back of stronger overseas subsidiary results, even as the buildout of new fulfillment centers added to fixed costs. Fulfillment is a service that integrates the entire logistics process — from product storage and order processing to packaging and delivery.

However, the cumulative picture shows that a full profitability recovery remains a work in progress. Sales for the first three quarters of this year totaled 2.53 trillion won, up 11.6 percent from 2.27 trillion won in the same period last year. Cumulative operating profit, however, fell 13.5 percent to 82.3 billion won from 95.1 billion won a year earlier.

Hanjin plans to sustain its growth momentum by expanding its overseas logistics network. The company was recently selected to carry out three government support projects aimed at reducing logistics costs for small merchants and export-oriented businesses. It is using its Incheon Airport global logistics center and overseas fulfillment network to support international delivery and export logistics for domestic small and medium-sized enterprises.

In the fourth quarter, the company expects cargo volumes to pick up with the year-end shopping season. Hanjin said it will expand its global network and logistics services to meet rising overseas export demand from domestic beauty and industrial goods companies.

"As overseas markets show growing enthusiasm for Korean beauty products and industrial goods broadly, we expect the global shopping season in the fourth quarter to fully kick in and allow us to set a new annual sales record," a Hanjin official said. "We will expand the global network supporting the overseas expansion of Korean manufacturing and small businesses, and focus on strengthening our core business competitiveness to secure future growth drivers."