Hanwha Systems Q3 operating profit rises 60% year on year, driven by the Middle East and KF-21

[Financial News] Hanwha Systems Co., Ltd. posted a 60.5% year-on-year jump in third-quarter operating profit to 99.1 billion won. Middle East exports and mass production of the Korean fighter KF-21 were key drivers.
Hanwha Systems Co., Ltd. announced preliminary third-quarter results on the 27th, reporting sales of 831.6 billion won and operating profit of 99.1 billion won. Sales rose 30% year on year, while operating profit soared by as much as 60.5%.
Middle East exports were a key factor behind the strong results. Hanwha Systems Co., Ltd. made large-scale exports of Cheongung-II multifunction radars (MFRs) to the United Arab Emirates (UAE), Saudi Arabia and Iraq, among other destinations. The performance of the active electronically scanned array (AESA) radars and avionics equipment installed on the KF-21 as it enters mass production also drove growth.
In the information and communications technology (ICT) segment, business was primarily driven by affiliate projects, including a next-generation system for Hanwha Life and an enterprise resource planning (ERP) system for Hanwha Philly Shipyard.
Growth is also expected to remain solid. As of the third quarter, the order backlog stood at 8.3956 trillion won in the defense segment and 469.7 billion won in ICT, leaving the company with nearly 9 trillion won in orders. In defense, the Cheongwang laser anti-aircraft weapon is also emerging as a future growth driver. It drew attention recently by achieving a 100% interception rate against drones in a demonstration.
The company is also expanding its space business, including the development of ultra-high-resolution synthetic aperture radar (SAR) satellites. Hanwha Group plans to invest a total of 20 trillion won in developing very-low-Earth-orbit satellites. Hanwha Systems Co., Ltd. recently sold its entire stake in Hanwha Ocean, securing more than 3 trillion won in investment capacity. It also divested its stake in Hanwha Philly Shipyard, escaping the impact of operating losses.

[email protected] Kim Yun-ho Reporter