STX Pan Ocean Co., South Korea’s largest bulk-shipping line, said third-quarter profit plunged 92% as overcapacity and the global recession squeezed cargo rates.

Net income fell to US$10.9 million ($15.1 million) from US$131.5 million ($182.4) a year earlier, the Seoul-based company said in a regulatory filing to the Singapore stock exchange. Sales slumped 61% to US$1.01 billion.

The Baltic Dry Index, a measure of commodity-shipping rates, averaged 61% lower than a year earlier in the quarter, hurting rates for hauling commodities. The index has gained in the past three months on traditional peak-season demand for coal during the northern hemisphere winter.

 

“The earnings reflect the lower rates,” said Song Jae Hak, an analyst at Woori Investment & Securities Co. in Seoul. “The Baltic index has been rising lately, and even if we can’t expect the rate to continue rising through next year, bulk carriers would see steady improvement in earnings from now on.”

 

STX Pan Ocean rose 0.9% to 11,300 won in Seoul trading at the 4 p.m. close. The company’s Singapore-listed shares climbed 4.2% to $13.88 before a trading halt.

 

The company posted an operating loss of US$18 million compared with a profit of $148 million a year earlier, according to the filing. Operating profit is defined as sales minus the cost of goods sold and administrative expenses.

 

In South Korea, the company reported a 9.6 billion won ($11.5 million) profit, compared with a profit of 145.3 billion won a year earlier. It had an operating loss of 26.5 billion won, compared with a year-earlier profit of 163.2 billion won, according to a filing to the Korea Exchange. Sales dropped 55% to 1.25 trillion won.

 

The different numbers reflect separate accounting standards in Singapore and South Korea.

 

The Baltic Dry Index averaged 2,811 in the last quarter compared with 7,123 a year earlier. The measure closed at 3,748 on the Baltic Exchange yesterday, a tenth consecutive gain, on demand to haul goods to China from Brazil and Australia.

 

The company plans to invest US$880 million by 2012 on eight very large ore carriers, according to a separate filing.

 

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