By Kyunghee Park

(Bloomberg) — Hanjin Shipping Co., South Korea’s greatest transport firm, dropped to its lowest degree on document after Korea Ratings Corp. reduce its credit standing as mounting competitors and weak freight charges undermine earnings.

The shares fell 16 % Monday to three,815 gained in Seoul and have fallen 37 % this yr, in contrast with a 1.4 % achieve in Korea’s benchmark Kospi index. Hyundai Merchant Marine Co., the nation’s second-biggest transport firm, was down 10 % to 4,330 gained and has dropped 55 % in 2015.

Korea Ratings, the native affiliate of Fitch Ratings, reduce Hanjin Shipping’s credit standing one notch to BB+ from BBB- due to a delay in earnings restoration and liquidity considerations amid a sluggish trade. Shipping strains globally have been promoting property, lowering staff and contemplating consolidations to stem losses as years of slowing world commerce and overcapacity eat into charges.

“The credit-rating downgrade will increase the interest burden for Hanjin Shipping,” mentioned Um Kyung A, an analyst at Shinyoung Securities Co. in Seoul. “The shipping companies are already suffering because they’re not making enough money from moving goods with rates so low.” Govt Hanjin Shipping posted a 58 % achieve in third-quarter web revenue to 58.4 billion gained ($50 million) after promoting property to lift money. The unit of Hanjin Group, which owns Korean Air Lines Co., has posted 4 straight years of losses.

Spot charges to haul a 20-foot container to Europe from Asia fell 39 % to $409 for the week ended Nov. 13, regardless of efforts by some transport corporations to lift the levy, in line with the Shanghai Shipping Exchange. Rates dropped to a four-month low of $233 a field final month.

©2015 Bloomberg News

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