Pan Ocean Achieves Highest Operating Profit in 13 Years... "Need to Monitor BDI Trends This Year"

[Asia Economy Reporter Yoo Hyun-seok] Pan Ocean has achieved its highest operating profit in 13 years due to the bulk sector market upswing. This year, the trend of the Baltic Dry Index (BDI) is expected to be crucial. Although the BDI, which had sharply declined, is rebounding, it is anticipated to be difficult for it to rise as much as last year.

According to the shipping industry on the 13th, Pan Ocean's consolidated operating profit last year was 572.9 billion KRW, a 154% increase compared to the previous year. Sales reached 4.0616 trillion KRW, an 85% increase.

Along with this, the bulk sector's sales and operating profit were 3.2959 trillion KRW and 514.6 billion KRW, respectively, increasing by 76% and 181% compared to the previous year. The container sector's sales and operating profit reached 353.3 billion KRW and 70.2 billion KRW, up 43% and 244%, respectively.

Park Seong-bong, a researcher at Hana Financial Investment, said, "In the fourth quarter of last year, sales and operating profit were 1.5 trillion KRW and 220.7 billion KRW, increasing by 138.2% and 266.8% compared to the same period last year." He added, "Securing profitability through high freight rates until mid-October last year positively contributed, resulting in a surprise operating profit of 198.3 billion KRW, exceeding market expectations of 198.3 billion KRW."

Strong performance is also expected this year. Although the BDI fell to 1,296 points at the end of last month, it has rapidly risen to 1,977 points this month. Researcher Park explained, "The BDI decline over the past three months is considered temporary and largely due to seasonal factors. Since the dry bulk vessel fleet is expected to increase by only 1.6% this year, a tight supply of dry bulk vessels is expected to support strong freight rates."

However, as forecasts suggest that the BDI will find it difficult to rise as much as last year, there is also analysis that profit-generating ability will decline. Kang Seong-jin, a researcher at KB Securities, said, "Pan Ocean's profit-generating ability is expected to decline compared to the fourth quarter of last year. The cumulative average BDI for the first quarter of this year is about 1,700 points, roughly half of the previous quarter."

He explained, "Both bulk freight rates and charter hire rates will fall, but freight rates are expected to be more flexibly variable. A decline in profitability in the first quarter of this year compared to the previous quarter appears inevitable."

This content was produced with the assistance of AI translation services.