Hyundai Glovis posted an operating profit of 521.5 billion won in the first quarter, up 4% from a year earlier. Although a one-off expense occurred due to the Middle East war, the company said it was able to maintain growth on the back of increased exports of complete cars from China. However, the company projected that the impact of rising oil prices will be fully reflected starting in the second quarter.
On the 23rd, Hyundai Glovis said first-quarter revenue came to 7.8127 trillion won, up 8.2% from the same period last year. Operating profit was 521.5 billion won, a 3.9% increase. The operating margin was 6.7%. A Hyundai Glovis official said, "It was in line with securities firms' estimates, and we delivered solid results despite heightened uncertainty in the global trade environment, including conflicts in the Middle East."
By business, logistics revenue rose 1.3% year over year to 2.4902 trillion won, but operating profit fell 17.3% to 164 billion won. Revenue grew as shipments of electric vehicles and large models increased in the domestic market, but profitability declined as weakness in container freight rates constrained growth in the global logistics business.
In shipping, revenue and operating profit came in at 1.4522 trillion won and 192.6 billion won, up 15.5% and 40.5%, respectively, from a year earlier. Volumes outside Hyundai Motor Group at higher freight rates, including Chinese local complete car makers (OEMs), increased, and cost improvements from rationalizing fleet operations also continued to have an effect.
Regarding Middle East risk, there were concerns about a volume decline due to strait closures, but the actual decrease was limited, the company said. Middle East-bound volume accounts for about 10% of Hyundai Glovis' auto distribution. While ship waiting occurred due to closures such as the Strait of Hormuz, leading to a one-off expense, stronger growth in volumes from non-affiliate customers, including exports of complete cars from China, had a positive impact on results.
A Hyundai Glovis official said, "Given the outlook for export growth from China, concerns about car carrier volumes due to Middle East risk will be limited." However, the company sees a high possibility that the impact of rising oil prices will intensify from the second quarter.
In distribution, revenue was 3.8703 trillion won and operating profit was 164.9 billion won. Revenue rose 10.3% year over year, while operating profit fell 1.0%. Revenue increased as supplies of completely knocked-down (CKD) kits to technology support assembly plants in emerging markets expanded.
A Hyundai Glovis official said, "Uncertainty in the global trade environment persisted in the first quarter, but based on stable business operations, we delivered results across all divisions that exceeded market concerns," adding, "We will continue to prioritize supply chain stability and service quality, respond swiftly to the rapidly changing market environment, and maintain a balance between profitability and growth."