Hanwha Aerospace has entered a new era with quarterly operating profit surpassing 1 trillion won, driven by major export projects in Poland and other countries. The impact of a fire at its Daejeon factory on its performance has been limited.
On July 31, Hanwha Aerospace reported consolidated sales of 9.2929 trillion won and operating profit of 1.3655 trillion won for the second quarter of this year. This marks a 47.2% increase in sales and a 58.5% increase in operating profit compared to the same period last year.
Notably, this is the first time the company has exceeded 1 trillion won in quarterly operating profit. The stable growth of its core ground defense sector, along with improved performance from subsidiaries Hanwha Ocean and Hanwha Systems, contributed to this achievement.
The ground defense sector recorded sales of 2.0175 trillion won and operating profit of 533 billion won, reflecting increases of 19% and 2%, respectively, from the previous year. In South Korea, major production projects such as the wheeled anti-aircraft gun Cheonho and the Cheonmu multiple rocket launcher are progressing steadily, while exports to Poland, Egypt, and the Middle East are on track to meet expectations.
The aerospace sector achieved sales of 760 billion won and operating profit of 37 billion won, with sales increasing by 17% year-on-year due to a rise in military orders, resulting in a return to profitability.
A Hanwha Aerospace official stated, "This year, we plan to deliver 30 K9 self-propelled howitzers and over 40 Cheonmu multiple rocket launchers to Poland. We expect to maintain strong performance in the second half of the year with deliveries to Poland, Egypt, and Australia."
Concerns regarding the impact of the Daejeon factory fire on performance were found to be limited. The official noted, "The incident at the Daejeon factory did not significantly affect our second-quarter results, but some sales were deferred due to the production halt. We are working to normalize production."
The order backlog for ground defense stands at approximately 38.3 trillion won, reflecting additional exports of K9 self-propelled howitzers to Finland in April and a supply contract for Cheonmu multiple rocket launchers to Estonia in May. The new orders for the second quarter are estimated at 1.5 trillion won.
Subsidiaries also reported strong performances, supporting the overall results of the group. Hanwha Ocean recorded sales of 5.4432 trillion won and operating profit of 736.1 billion won, driven by high-profit projects such as LNG carriers, marking increases of 65% in sales and 98% in operating profit compared to the previous year. Hanwha Systems achieved record results with sales of 1.1176 trillion won and operating profit of 103.7 billion won, bolstered by increased exports of defense products, including multifunction radars (MFR).
On the same day, Hanwha Aerospace reiterated that its recent investment in Korea Aerospace Industries (KAI) is a strategic move to enhance synergies in the defense and aerospace sectors. As of July 24, Hanwha Group's stake in KAI has increased to 14.64%. However, the company clarified that there are no plans for additional share purchases to secure management control.
The official stated, "Acquiring approximately 15% of KAI shares with Hanwha Systems is a strategic investment aimed at establishing a collaborative framework in key defense and aerospace sectors. We are not currently in discussions with other shareholders, such as the Export-Import Bank, regarding additional share acquisitions."
* This article has been translated by AI.
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