Pan Ocean on Recovery Path
S. Korea’s Pan Ocean Co. is expected to see its earnings improve amid rising Baltic Dry Index (BDI) that affects spot contracts accounting for more than half of the South Korean bulk carrier’s total shipping contracts, reports the Pulse.
It has also resumed container services in Southeast Asia for the first time since it exited receivership in early 2015. Pan Ocean’s resumption of services came via a slot-sharing agreement with Hanjin Shipping to share space on Hanjin’s Korea Haiphong Express service.
As of the fourth quarter last year, 59 percent of Pan Ocean’s total volume of transported goods was based on spot or short-term contracts that are affected by the BDI market environment.
Despite the overall slump in the shipping industry, Pan Ocean has been seen a gradual increase in its sales since its exit from its rehabilitation procedure in July, last year. Between October and December last year, Pan Ocean raised 512.1 billion won ($451.7 million) in sales, up 4 percent from the previous quarter’s 491.7 billion won.
The slight increase in sales came even despite a drop in BDI, which fell to an annual low of 478 points in the end of last year after hitting an annual high of 1,222 points in August.
As of end of last year, Pan Ocean operates 193 fleets, of which 79 are privately owned while the remaining 114 fleets are chartered ones. The number of chartered fleets increased 33 percent from 86 due to an increase in cargo volume last year.
Pan Ocean said it seeks to strengthen its intra-Asia container services by resuming calls to southern China and Southeast Asia.
