What Happened at Moorim P&P?
Moorim P&P experienced a 21% decline in revenue and a staggering 109% drop in operating profit in the first half of 2025, resulting in a net loss. The pulp division’s widening operating loss and declining sales in the paper division were particularly concerning.
Why the Poor Performance?
Several factors contributed to Moorim P&P’s weak performance:
- Falling Global Pulp Prices: The decline in global pulp prices directly impacted the profitability of Moorim P&P’s core pulp business.
- Rising Raw Material Costs and Soaring Exchange Rates: Increased raw material costs and a surge in the KRW/USD exchange rate put further pressure on profitability by increasing import costs.
- Domestic Economic Slowdown: The sluggish domestic economy weakened demand for paper products, affecting sales in the paper division.
What Should Investors Do?
Investors should maintain a cautious approach towards Moorim P&P. Closely monitor pulp price recovery, the performance of new business ventures, and the overall macroeconomic environment. It’s advisable to postpone investment decisions until a clearer picture of the company’s performance emerges in the second half of the year.
Action Plan for Investors
- Monitor Performance: Keep a close eye on upcoming earnings releases and track pulp prices and exchange rate fluctuations.
- Manage Risk: Develop a risk management plan to mitigate potential losses due to exchange rate and raw material price volatility.
- Consult Experts: Seek professional advice to formulate a comprehensive investment strategy.