Hanwha Aerospace Reports 46% Drop in Q3 Operating Profit, K9 Deliveries Scheduled for Q4

Hanwha Aerospace reported a decline in performance due to adjustments in weapon system delivery schedules.
 
On October 29, Hanwha Aerospace announced that its consolidated revenue for the third quarter reached 6.943 trillion won, with an operating profit of 452 billion won. Compared to the same period last year, revenue decreased by 6%, while operating profit fell by 46%.
 
The ground defense sector saw a significant drop in performance, dragging down overall results. Revenue and operating profit in this segment fell by 41% and 96%, respectively, to 1.2455 trillion won and 21.7 billion won compared to the previous year. The delivery schedules for major projects, including the second batch of K9s for Poland, are concentrated in the fourth quarter, with some deliveries made early in the second quarter affecting the figures.
 
However, the company expects a substantial improvement in performance in the fourth quarter as deliveries of the K9s to Poland and the second batch of Chunmoo systems commence, along with ongoing K9 projects in Egypt and Australia. The company anticipates continued growth next year due to production from existing orders, with a backlog of approximately 35 trillion won as of the end of the third quarter.
 
In the aerospace sector, revenue increased by 9% year-on-year to 659.9 billion won, but the segment reported an operating loss of 2.4 billion won, marking a shift to a deficit. This loss was attributed to the impact of increased deliveries of the GTF engines on the international joint development project (RSP). Excluding the RSP project, the operating profit was 20.3 billion won.
 
Hanwha Systems, a subsidiary, offset some of this downward pressure with significantly improved results, reporting third-quarter revenue of 831.6 billion won and operating profit of 99.1 billion won, representing increases of 30% and 60%, respectively, compared to the same period last year. Additionally, Hanwha Ocean expanded its revenue and operating profit by 13% and 68%, respectively, thanks to a higher proportion of high-profit vessels.
 
A Hanwha Aerospace official stated, "Although the third quarter was affected by delivery schedule adjustments and one-time costs, we expect performance to improve significantly starting in the fourth quarter. The Daejeon plant will prioritize safety to minimize production disruptions."