Logistics Business Sailing Smoothly, Shipping and Distribution Lag Behind
Performance Forecast for This Year Also Presented... Operating Profit Expected at 1.7 Trillion Won
Hyundai Glovis delivered strong first-quarter results that exceeded market expectations despite a decline in demand in the automobile market and increasing geopolitical risks.
On the 25th, Hyundai Glovis announced that it recorded sales of KRW 6.5864 trillion and operating profit of KRW 384.8 billion in the first quarter of this year. Compared to the same period last year, sales increased by 4.5%, but operating profit decreased by 5.4%. These results surpassed the market consensus of KRW 6.4939 trillion in sales and KRW 371.3 billion in operating profit. Compared to the previous quarter, sales and operating profit rose by 1.1% and 9.7%, respectively.
By business segment, the logistics division recorded sales of KRW 2.2748 trillion and operating profit of KRW 181.7 billion, representing increases of 6.1% and 8.2% year-on-year. This growth is attributed to strong inland transportation of overseas finished vehicles.
The shipping business showed some slowdown. Sales increased by 14.1% year-on-year to KRW 1.1511 trillion, but operating profit fell by 21.9% to KRW 82.5 billion during the same period. Although sales grew due to improved freight rates for finished vehicle maritime transport and increased non-affiliated sales, profitability was somewhat weakened by factors such as Red Sea risks, shortage of car carrier vessel space, and continued high charter rates.
In distribution, sales reached KRW 3.1605 trillion with operating profit of KRW 120.6 billion. Sales rose slightly by 0.4% year-on-year, while operating profit declined by 9.4%. The decrease in operating profit was explained by partial adjustments in the overseas trading business. Hyundai Glovis’s conference call on the day was conducted via live broadcast on YouTube, aiming to facilitate direct communication between the company’s management and not only institutional investors but also general shareholders.
Meanwhile, Hyundai Glovis also presented its performance outlook for this year. It expects to achieve annual sales of KRW 26 trillion to 27 trillion and operating profit of KRW 1.6 trillion to 1.7 trillion. Despite challenging global logistics and shipping environments, the company anticipates growth in both sales and operating profit compared to the previous year.
Hyundai Glovis maintains its stance to meet market expectations through steady investment. The decision to invest in six new ultra-large car carriers (each with a loading capacity of 10,800 vehicles) worth KRW 1 trillion, announced alongside the earnings report, aligns with this strategy.
A Hyundai Glovis representative explained, "From a mid- to long-term perspective, we decided on the vessel investment plan to provide more stable maritime transportation services to global strategic shippers. We will continue steady investments to grow both our scale and profitability."
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