South Korean feeder operator and chemical tanker operator Heung-A Shipping, having suffered a larger loss in 2017, disclosed that it will sell another vessel to improve its liquidity.
The company’s CEO, Park Seok-mook, made this announcement at Heung-A’s annual general meeting (AGM) on 23 March.
During the AGM, Park confirmed that Heung-A had sold 1998-built 1,032 teu Heung-A Asia to Chinese buyers for USD3.7 million, chartering back the vessel for USD7,500/day.
Park added that by the end of April, Heung-A will sell the 2002-built 1,032 teu Heung-A Venus.
Since June 2017, Heung-A has been selling older vessels to improve its liquidity as the company’s earnings came under pressure.
In June 2017, Heung-A sold the 1991-built 204 teu Nova (renamed Hai Sheng) for USD770,000. In December 2017, the company sold 2010-built 11,896 dwt chemical tanker Golden Pioneer for KRW17.3 billion.
In December 2017, Heung-A said that it would get nearly USD17 million from Korea Maritime Corporation to expand its fleet.
In November 2017, Heung-A also announced that it would issue 41 million new shares to raise KRW33.7 billion (USD31.6 million) for working capital, after suffering consecutive losses for the first nine months of the year.
The company’s net loss widened to KRW73.43 billion for 2017, from KRW17.17 billion in 2016, amid a competitive intra-Asia and chemical shipping market.
The losses have caused Heung-A’s shareholders’ equity to drop to KRW117 billion, from KRW192.5 billion at the end of 2016.
By segment, while the container shipping unit’s revenue increased slightly, to KRW688.6 billion in 2017, from KRW682.7 billion in 2016, the chemical tanker unit’s revenue was down 5% year on year to KRW908.8 billion.
Revenue from Heung-A’s container segment fell in tandem with cargo volumes, as the company handled 1,220,862 teu in 2017, down from 1,223,973 teu in 2016.