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.
Frequently Asked Questions (FAQ)
What are Moorim P&P’s main business segments?
Moorim P&P’s primary businesses are pulp and paper manufacturing. They also have operations in finance and emerging sectors like pulp molding and cellulose materials.
What was the primary cause of the poor performance in H1 2025?
The decline in global pulp prices and the surge in the KRW/USD exchange rate were the main drivers of the weak performance.
Should I invest in Moorim P&P?
A cautious approach is recommended. It’s advisable to wait for clearer signs of performance recovery in the second half of the year before making investment decisions.