Hyundai Glovis plans to increase its fleet of large car carriers (PCTC) from 98 to 110 by the end of the year to meet rising maritime transport demand from China. The company is also focusing on expanding into new markets, including defense logistics.
During a conference call on July 23, CEO Lee Kyu-bok stated, "Although rising oil prices and increased shipping costs have temporarily impacted profitability, we achieved solid results based on our unwavering strength. We expect profitability to recover starting in the third quarter as previously incurred costs translate into revenue."
In the second quarter of this year, Hyundai Glovis reported a revenue of 8.7054 trillion won, a 15.8% increase compared to the same period last year. This growth was driven by a 20.9% rise in shipping business revenue, which reached 1.6441 trillion won, thanks to increased orders from Chinese original equipment manufacturers (OEMs).
Hyundai Glovis announced plans to expand its fleet of car carriers, which can transport 6,500 vehicles each, to 120 vessels by next year in response to the growing demand for maritime transport from China.
Chief Financial Officer Yoo Byung-gak noted, "In the first half of the year, China's automobile exports increased by about 66% compared to the previous year, exceeding expectations and driving a strong market for car carriers. We anticipate continued growth in demand for finished vehicle maritime transport, particularly from China, in the second half of the year, which supports our plan to increase the fleet to 110 vessels."
However, the company reported an operating profit of 495 billion won for the second quarter, an 8.1% decrease from the same period last year, primarily due to rising fuel costs. Hyundai Glovis estimated a loss of approximately 60 billion won in the second quarter due to timing differences in freight rate adjustments related to fuel price increases.
In terms of business segments, both logistics and distribution continued to show growth. The logistics segment recorded sales of 2.8558 trillion won, a 10.3% increase year-on-year, driven by non-affiliated cargo and increased inland transportation in North America. However, operating profit in this segment decreased by 5.9% to 191.8 billion won due to lower container contract rates. The distribution segment achieved sales of 4.2055 trillion won and an operating profit of 172.3 billion won, reflecting increases of 17.9% and 27.8%, respectively, compared to the previous year, thanks to the ramp-up of semi-knocked down (CKD) exports to emerging markets and growth in non-ferrous metal trading.
Hyundai Glovis expects improved performance in the second half of the year, driven by the effects of new car launches, increased maritime transport demand from China, and rising CKD exports to emerging markets. The company is also expanding its business by handling some defense logistics transportation for Hanwha Aerospace.
Lee Kyu-bok emphasized, "Despite the temporary impact of rising fuel costs due to unforeseen war effects, we are more focused on the continuous revenue growth seen in the first and second quarters. If we can expand non-affiliated cargo and combine that with the anticipated global logistics growth in the second half, we will be on track to achieve our revenue targets for this year and our goal of 40 trillion won in revenue by 2030."
* This article has been translated by AI.
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