LX International Logistics Profit Soars 151% on Container Rates

LX International's logistics division posted a 151.2% year-on-year jump in third-quarter operating profit to 93.2 billion won, driven by container shipping rates that held firm through the quarter. The number lands well above what Seoul expected, and it reframes the earnings picture for one of Korea's largest diversified logistics-to-resources groups.

The catalyst sits in freight data. The Shanghai Containerized Freight Index averaged 3,405 points in the third quarter, a level that kept liner earnings elevated across LX International's shipping operations. Group-wide, total operating profit reached 143.1 billion won for the quarter — roughly 13% above the market consensus of 127.3 billion won.

What drove the earnings beat?

Shinhan Investment Securities, which published the results analysis on 5 November, credited two forces: the container rate environment and a recovery across the group's resources and industrial businesses.

Analyst Han Seung-hun of Shinhan Investment Securities explained: "Operating profit in the resources division came to 14.9 billion won, supported by rising thermal coal prices in Indonesia. Plans to acquire a new mine are expected to take shape next year."

The trading and new growth businesses added a further 35 billion won of operating profit.

The analyst noted the breadth of the recovery: "Operating profit grew by a triple-digit percentage, thanks to favorable coal market conditions and improved results at major subsidiaries Poseung Green Power and LX Glass."

Where the quarter showed cracks

Not every division improved on the previous quarter. Han flagged a margin squeeze in resource trading: "Compared with the previous quarter, however, lower production in the jointly developed areas of Indonesia's coal mines reduced the profit margin in resource trading."

That point matters for how investors read the run-rate. Indonesia's coal operations delivered the year-on-year gain, but sequential output declines in the jointly developed mining areas cut into trading margins. The division's 14.9 billion won profit therefore reflects price strength more than volume growth.

What does the broker recommend?

Shinhan Investment Securities maintained its "Buy" rating on LX International with a target price of 66,000 won. The stance rests on the beat against consensus and on the prospect of portfolio expansion in resources, with the planned mine acquisition expected to take concrete shape next year.

For shippers and forwarders watching Korean logistics groups, the results confirm that elevated container rates — with the SCFI holding above 3,400 points on quarterly average — are still flowing through to carrier and logistics operator earnings. For LX International itself, the forward question is whether thermal coal prices and Indonesian mine output can sustain the resources division's momentum while the shipping cycle, not the mining calendar, decides the logistics side.