The Korea Herald


[EQUITIES] ‘Korean Air’s profits to improve on Hanjin Shipping’s court receivership’

By 이지윤

Published : Aug. 31, 2016 - 13:35

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[THE INVESTOR] Hana Financial Investment on Aug. 31 said that Korean Air, the flagship unit of Hanjin Group, could elevate profitability in the rest of the year following creditors’ decision to put its ailing sister firm Hanjin Shipping under court receivership.

The nation’s No. 1 air carrier together with other Hanjin companies has poured resources into helping out the cash-strapped shipper.

“This year, Korean Air’s earnings could surge 33 percent to a record 1.2 trillion won (US$1.07 billion) compared to a year ago,” Shin Min-seok, a Hana analyst, said in a report. 

“But the company is likely to see an operating loss due to its injection of money into Hanjin Shipping.”

The analyst predicted that the company’s debt-equity ratio would improve from next year due to upbeat travel demands. Falling fuel prices and favorable foreign exchange rates also would affect positively the company’s overall profitability.

He estimated Korean Air’s loss related to Hanjin Shipping to reach 376.1 billion won.

“Uncertainties regarding Hanjin Shipping have been removed and that would affect the company’s stock price positively,” he added.

By Lee Ji-yoon (