NICE Investors Service Upgrades Hyundai Glovis Credit Rating to 'AA+'

NICE Investors Service announced on December 4 that it has upgraded Hyundai Glovis's corporate credit rating and unsecured bond rating from AA to AA+, and changed the credit rating outlook from Positive to Stable.

NICE Investors Service assessed that Hyundai Glovis holds a very strong competitive position based on its diversified business structure and stable business relationships with its affiliates. The agency stated, "The company has diversified its business structure across logistics, shipping, and distribution," and added, "Leveraging its global logistics network, Hyundai Glovis has diversified its sales regions-31% domestic, 24% North America, and 23% Europe-and has achieved high growth in sales to North America."

The agency further analyzed that the company has delivered improved operating results, driven by robust overseas cargo volumes, enhanced fleet operation efficiency, and expanded CKD supply. NICE Investors Service noted, "In logistics, the increase in operating rates at U.S. manufacturing plants such as Metaplant America has generated related logistics demand, leading to growth in overseas logistics sales," and added, "With increased production capacity in the U.S. due to affiliate investments and the recovery of the domestic automotive industry, mid- to long-term sales growth is expected."

Regarding shipping, the agency stated, "Performance in this segment has significantly improved due to the renewal of long-term transportation contracts with affiliates, increased orders from non-affiliate clients, and rationalized fleet operations such as reducing high-cost charters," and continued, "Given favorable supply-demand conditions and the commencement of LNG and LPG transportation contracts, the company is expected to maintain strong performance even during periods of declining freight rates." The agency added, "Despite changes in the business environment, performance is expected to improve based on a stable sales foundation centered on affiliates and strong profit-generating capabilities."

NICE Investors Service expects Hyundai Glovis to maintain a very sound financial structure based on its stable cash flow generation. The agency stated, "With annual EBITDA exceeding 2 trillion won, the company can independently meet investment needs for overseas logistics bases and vessels, while maintaining a trend of debt repayment including lease liabilities," and added, "Although capital requirements are expected to increase due to mid- to long-term investment plans and expanded dividends, external borrowing will likely be limited considering the company's own profit-generating capacity and cash holdings."

This content was produced with the assistance of AI translation services.