On the 26th, Korea Investment & Securities forecasted that Hyundai Glovis, a logistics company affiliated with Hyundai Motor Group, will show a growth trend again starting from the first quarter of this year, based on its strong logistics competitiveness.
Choi Go-woon, a researcher at Korea Investment & Securities, stated in a report on the same day, "Hyundai Glovis achieved record-high profits in 2022 benefiting from the logistics crisis, but profitability declined last year," adding, "Considering the profitability rebound in the first quarter and the freight rate settlement trend, growth is expected to resume from this year."
Hyundai Glovis recorded sales of 6.6 trillion KRW in the first quarter of this year, a 5% increase compared to the same period last year, while operating profit decreased by 5% to 384.8 billion KRW. Compared to the previous quarter, sales increased by 1% and operating profit rose by 10%.
An analyst explained, "The profit in the shipping sector increased by 37% quarter-on-quarter due to the adjustment effect of finished car ocean transportation (PCC) freight rates and the settlement of demurrage fees (costs incurred when ships are delayed at berth due to unloading delays)," adding, "Although the demurrage fee settlement is a one-time factor, profitability is expected to continue improving in the second quarter as contract rates were raised in the first quarter."
He analyzed, "The semi-knocked down (CKD) transportation sector maintained performance at the same level as the previous year despite the slowdown in finished car production, due to increased demand for safety stock accumulation," and "The overseas logistics business improved profitability quarter-on-quarter thanks to strong inland transportation volumes in the Americas and Asia-Pacific regions."
The analyst noted, "Although uncertainty in the logistics market is high due to PCC supply shortages and the Red Sea incident, there are not many companies like Hyundai Glovis that can maintain stable logistics services," and predicted, "The PCC supply shortage implies a supply shortage in the automobile logistics market, which could positively affect Hyundai Glovis."
He concluded, "Considering the profitability rebound in the first quarter and the freight rate settlement trend, Hyundai Glovis is expected to resume growth from this year," and presented an operating profit forecast of 1.64 trillion KRW for this year, a 5% increase compared to the previous year.
© The Asia Business Daily(www.asiae.co.kr). All rights reserved.
