Hanjin second half business outlook positive: report

KOREAN shipping giant Hanjin Shipping's performance outlook for the second half is looking rosy, says a report.



In a recently released report, Samsung Securities' analyst Hoon Lee said the security house was bullish because surging fuel costs in Q2 should be offset by fuel surcharges in Q3, which is expected to be imposed by Hanjin based on the previous quarter's average fuel price; also five 7,500 TEU container vessels are scheduled for launch in Q3 on profitable Asia-US routes, adding 22 per cent to Hanjin's total capacity on such routes.



Samsung said earnings should improve as a result of increasing volumes and a declining unit cost; besides pressure from a strengthening won against the US dollar, which negatively affected the operating results in the first half, is expected to ease gradually going forward.



Samsung pointed out that dollar denominated sales grew six per cent year-on-year in Q2, but won denominated sales declined eight per cent on won appreciation.



Samsung said it had revised down its 2005 operating profit estimates of Hanjin by five per cent to reflect the worse - than - expected Q2 results, but reiterated a Buy recommendation on the stock.



The security house also said that the recent improvements in US economic indicators should alleviate concerns of a possible hard landing for the container industry.