The assets of Polaris shipping has increased by 4 times during the last 5 years. The main reason of assets increase is seen as vessel purchase. In spite of the liabilities increase resulted from vessel purchase, Polaris shipping still maintains a good debt ratio.

According to the audit report released on 15th of Polaris shipping, the assets reached KRW one trillion 727.5 billion, an increase by 3.7 times, on 473.2 billion in 2010. The liabilities & capital each reached KRW one trillion 66.4 billion, 187.9 billion. A substantial portion of assets increase accounts for the liabilities due to delivery of new vessels.

Generally speaking, in shipping industry, the loan borrowed from the international banking system constitutes approximately 80-90% of the cost to build new vessel. This kind of loan is assorted into financial lease liabilities, a part of non-current liabilities.

The financial lease liabilities which is almost half of debt of Polaris shipping has been reached KRW 748.8 billion in 2014 increased by 500.8 billion compared to a KRW 248 billion in 2010. The vessels of Polaris shipping which totaled 21 vessels have gradually been delivered. i.e. 3 vessels in 2010, 2 vessels in 2011, 8 vessels in 2012, 5 vessels in 2013, 3 vessels in 2014. Polaris shipping is currently operating 31 vessels which consist of 27 own vessels & 4 chartered vessels. The rest of the debt is long-term borrowing. The long-term borrowing involved with vessel purchase has increased from KRW 19.7 billion in 2010 to KRW 310.8 billion in 2014. In terms of debt ratio, it recorded 586%, a drop by 108% from the same period in 2013. The level of debt ratio is better than other Korean major shipping companies.

“We’re making a profit constantly based on the long-term contracts and have accumulated enough earned surplus to keep the present debt ratio of this company.” the person in charge working for Polaris shipping said.

 
The earned surplus last year which accounts for 78% of total capital of Polaris shipping amounted to a KRW 195.9 billion compared to a KRW 44.5 billion in 2010. An improvement of a KRW 151.4 billion. It seems that the assets of Polaris shipping will be increased gradually in the near future. Polaris shipping has already ordered 5 new vessels until now. The time of delivery will each be one in 2015, one in 2016, one in 2017, two in 2018.