[Click eStock] "Freight Rates Remain Strong... Taewoong Logics Surprises with Additional Strong Earnings"

[Asia Economy Reporter Ji Yeon-jin] IBK Investment & Securities stated on the 20th that regarding Taewoong Logics, considering the global economic recovery and the shortage of shipping capacity, the strong freight rates are expected to continue for the time being, and further improvement in performance is anticipated.

Taewoong Logics is a third-party logistics company (operating independently without a parent company) that has grown by focusing on maritime transportation of petrochemical products, with major clients including large corporations such as Lotte Chemical and Kumho Petrochemical. Regardless of the petrochemical product price market conditions, the cargo volume has been steadily increasing every year, and it is evaluated that the company has maintained continuous transactions with large corporations over the past 20 years based on stable shippers, secured shipping capacity, and freight rate competitiveness.

Last year, the company's sales composition by business division was divided into international logistics 67%, CIS logistics 14%, project logistics 9%, and others 10%. In the first quarter of this year, consolidated sales amounted to KRW 150.2 billion, a 51% increase compared to the same period last year, and operating profit was KRW 10.5 billion, which increased by 208%. Among the business divisions, international logistics sales surged due to a sharp rise in maritime freight rates, increasing by 105% and 73% year-on-year, respectively.

Lee Min-hee, a researcher at IBK Investment & Securities, said, "Unlike the fourth quarter of last year’s performance (where sales increased significantly but profitability deteriorated) when the rapidly rising international freight rate increases were not fully reflected in transportation contracts, from this year, freight rate increases have become predictable and costs can be passed on to shippers, resulting in improved profitability." He added, "International logistics sales are expected to nearly double this year, and project logistics sales are also expected to grow by 30% YoY with the recovery of the EPC market."

This year, the company's consolidated sales are projected to grow by 76% and operating profit by 139% compared to the previous year.