Hyundai Glovis to spend $6.5 billion, seek M&As for expansion

Hyundai Glovis Co., the logistics unit of South Korea’s Hyundai Motor Group, said on Friday it will spend 9 trillion won ($6.5 billion) through 2030 and seek mergers and acquisitions to expand the scope of its business from automotive to other promising sectors.

Through the investment plan, Lee Kyoo-bok, the chief executive, said the company aims to achieve 3 trillion won in annual operating profit with an annual profit margin of 7% by 2030.

Sales will grow to over 40 trillion won in 2030 from 25 trillion won in 2023, he said.

“We plan to achieve aggressive sales growth and high returns at the same time,” the CEO said during the company’s annual Investor Day in Seoul. “If necessary, we’ll also actively pursue M&As for business expansion.”

The planned 9 trillion won investment will break down into 36% for logistics, 30% for shipping and 11% for logistics and distribution. The remaining 23% will go to new businesses, he said.

Company officials said they are eyeing smart logistics solutions and battery recycling as new growth areas.

FROM CAR CARRIER TO TOTAL LOGISTICS PROVIDER

Hyundai Glovis mainly handles vehicles made by Hyundai Motor Group’s two automaking units – Hyundai Motor Co. and Kia Corp. – for overseas shipments. The firm also counts Volkswagen AG and other global carmakers among its clients.

Company officials said on Friday they're now striving to secure more automaker clients, including China’s BYD Co.

Hyundai Glovis is also striving to diversify its transport business portfolio from automobiles into other products, including natural gases, to become a total logistics provider, officials said.

Earlier this week, the company said it is entering the liquefied natural gas transport business with its first LNG carrier, the Woodside Scarlet Ibis.

The 174,000 cubic-meter LNG carrier was built by HD Hyundai Samho Co. and chartered by Australia’s Woodside Energy Group.

“We shipped 3.4 million cars through our fleet of ships last year. We aim to raise the volume to 5 million by 2030 and control 20% of the global sea transportation market,” said a company official.

The company’s pure car and truck carriers (PCTCs) will rise from the current 85 ships to 128 by 2030, he said.

SHAREHOLDER-FRIENDLY POLICY

On Friday, Hyundai Glovis also unveiled a series of shareholder-friendly measures to boost its share price and enhance shareholder value.

The company said it plans to spend 25% of annual net profit as dividend payout for at least three years from 2025.

Its dividend payment policy has been changed to ensure a 5% increase every year, it said.

“We expect our dividend per common share to rise to 6,300 won by 2027, more than double the amount paid out last year,” said a company official.

To increase the number of stocks in circulation, Hyundai Glovis said on Friday it is offering a one-to-one free share offering to existing shareholders. New shares will start trading on the market on Aug. 2.

Write to Jae-Fu Kim at hu@hankyung.com
In-Soo Nam edited this article.