Moody's Upgrades Hyundai Glovis Rating to A3 Stable

Key Rating Upgrade Announced

Moody's Ratings has officially upgraded Hyundai Glovis Co., Ltd.'s issuer rating to A3 from Baa1, shifting the outlook to stable from positive. This decision reflects the company's enhanced financial performance and prudent management, signaling strong creditworthiness.

Performance Overview

The upgrade is driven by Hyundai Glovis's sustained improvement in profitability and low debt leverage. The company's operating margin rose to 7.0% from 6.2%, a level Moody's expects will be maintained. This growth is fueled by its car and truck carriers business, benefiting from solid automotive demand and higher freight rates. Financially, its adjusted debt/EBITDA ratio improved to 1.4x from 1.8x due to higher earnings and debt reduction.

Impact and Market Outlook

The A3 rating is anchored by operational stability from captive demand via Hyundai Motor Company and Kia Corporation. While exposed to the cyclical auto industry, the company's conservative financial policies and a net cash position of approximately KRW0.5 trillion mitigate risks. The stable outlook reflects Moody's expectation that Hyundai Glovis will maintain its steady profitability and low leverage over the next 12-18 months.

Summary

In conclusion, the upgrade to A3 highlights Hyundai Glovis's robust financial health and operational efficiency. The stable outlook suggests a period of sustained, positive performance, supported by strong internal demand and disciplined financial strategy, reinforcing investor confidence.

FAQ

Q: Why did Moody's upgrade Hyundai Glovis's rating?
A: The upgrade was due to sustained profitability improvement, low debt leverage, and conservative financial management.

Q: What is the new rating and outlook for Hyundai Glovis?
A: The new issuer rating is A3, and the outlook is stable.

Source: Investing.com