South Korea’s Hanjin Shipping sank deeper into the red with a net loss of KRW224.5bn ($218.78m) in the quarter ended 31 March 2014, widening from a deficit of KRW34.7bn a year ago.

The first quarter loss reflected a loss on disposal of old vessels of KRW157.3bn. Hanjin Shipping said that disposal of old vessels was part of its plans to improve financial structure.

Revenue during the quarter dropped 7.6% year-on-year to KRW2.15trn dye to the fall of container freight rates during the off-peak season, despite an increase in container transport volumes.

“Operating profit is expected to improve from second quarter as continuous rate restoration and cost-cutting efforts since the second half of last year show full effect. We also expect to secure liquidity as financial structure improvement plans such as the liquidation of the long term contract-based bulk and LNG business and the capital increase bring about tangible results,” Hanjin Shipping said.

Looking ahead, the shipowner noted that although deliveries of mega boxships are being made, carriers are continuing their various efforts such as service rationalisation, slow steaming, early return of chartered-in vessels and scrapping of old vessels, in an overall bid to improve profitability.

“Additionally, rate increase during the coming peak season and stable oil price is also likely to contribute to increase in profitability,” Hanjin Shipping said.

“As for bulk sector, the global bulk freight volume is expected to rise back up due to recovery of Chinese construction business, resumption of Columbia’s coal exports, etc.”