Hanon Systems' Q3 operating profit rises 26.6% year on year to 120.6 billion won

[Financial News] Hanon Systems' operating profit in the third quarter of this year was nearly 30% higher than in the same period a year earlier.
On the 5th, Hanon Systems, an automotive thermal-management company affiliated with Hankook & Company Group (Chairman Cho Hyun-bum), said it posted consolidated revenue of 2.6569 trillion won and operating profit of 120.6 billion won in the third quarter. Its operating margin was 4.5%.
Operating profit rose 16.3% from the previous quarter. Through the third quarter, revenue increased 1.2% to 8.2804 trillion won, while operating profit climbed 77.9% to 321.5 billion won.
Hanon Systems said efforts to improve operational efficiency and reduce costs had led to improved profits. Its cost-of-sales ratio in the third quarter fell 0.6 percentage points to 88.5%, from 89.1% in the previous quarter, while its selling, general and administrative expenses ratio declined from 7.3% to 7.0%. The cumulative cost-of-sales ratio improved by 2.0 percentage points, from 91.1% in the same period last year to 89.1%.
Hanon Systems said the decline in revenue was due to temporary volume adjustments by customers and exchange-rate effects. It said sales rose in Europe, but volumes fell because of production disruptions at major customers in South Korea.
Electrification (xEV) accounted for 31% of revenue in the second quarter and 33% in the third. Hanon Systems attributed the increase to higher deliveries of electrification products to major customers as demand for electric vehicles in Europe grew. The company plans to respond to changing market demand with a thermal-management portfolio spanning all powertrains, from internal combustion engines to hybrids and battery electric vehicles.
Hanon Systems ramped up its aftermarket business this year. It began selling products through T'Station in South Korea and secured an order for an initial shipment from European auto parts distributor Inter Cars. It is also considering applying its thermal-management technology in off-road mobility fields such as agricultural and construction machinery and defense.
The company is also expanding beyond the automotive sector. It has begun developing thermal-management solutions for energy storage systems (ESS), power conversion systems (PCS) and solid-state transformers (SSTs). It is also pursuing a gradual entry into the server thermal-management market for AI data centers.
Hanon Systems Vice Chairman and CEO Soo Il Lee said, “Even amid uncertainty in the global market, our efforts to fundamentally improve processes and enhance operational efficiency are leading to stable business performance.” He added, “We will continue to respond flexibly to changes in the electrification market, identify new growth opportunities based on our accumulated thermal-management expertise, and strengthen the foundation for sustainable growth.”
[email protected] Kim Dong-chan Reporter