Operating profit fell 66.9 percent from the previous quarter, while revenue declined 6 percent to 6.09 trillion won, the company said Thursday. It swung to a consolidated net loss of 36.7 billion won from a 699 billion won profit a year earlier.
The sharpest decline came from its land systems division, which produces K9 self-propelled howitzers and Chunmoo multiple rocket launchers. Operating profit plunged 96 percent to 21.7 billion won, while revenue fell 41 percent to 1.25 trillion won.
During Thursday's earnings conference call, executives attributed the decline to weapons deliveries shifting to the fourth quarter, a higher share of lower-margin domestic sales and production disruptions at the Daejeon plant.
The division also recorded approximately 46 billion won in one-off expenses, including 30 billion won related to the Daejeon accident and 16 billion won in other provisions and costs.
"Exports are more profitable than domestic deliveries, so the higher share of domestic revenue temporarily reduced profitability," said Han Sang-yoon, the company's investor relations executive.
Hanwha Aerospace plans to restore normal operations at its Daejeon plant during the first half of 2027, while increasing production at its Boeun and Yeosu facilities to minimize disruptions.
The company expects earnings to recover in the fourth quarter as major exports resume, particularly to Poland.
It raised its annual delivery forecast for Chunmoo launchers to Poland from 40 to more than 60 units, while maintaining its target of delivering over 30 K9 howitzers this year.
Its land systems order backlog stood at approximately 35 trillion won at the end of September.
Meanwhile, the aerospace division posted a 2.4 billion won operating loss despite a 9 percent revenue increase, reflecting widening losses from its geared turbofan engine partnership.
Hanwha Ocean's operating profit rose 68 percent to 485.7 billion won, while Hanwha Systems posted a 60 percent increase to 99.1 billion won, partially offsetting weaker land systems earnings.
Hanwha Philly Shipyard recorded a 93.6 billion won operating loss, adding to the group's consolidated losses.
Looking ahead, Hanwha Aerospace is expanding its defense business overseas, including a U.S. Army contract for additional K9MH wheeled howitzer prototypes and recent K9 and Chunmoo agreements with Spain and Croatia.
The company expects increased weapons deliveries and overseas orders to support future growth, although production recovery and delivery schedules remain key factors.
Hanwha Aerospace shares were trading at 678,000 won, down 10.79 percent from the previous close, as of 10:10 a.m. on Friday, Oct. 30.
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