LIG D&A’s Q3 revenue tops 1 trillion won, but operating profit falls 24.6%

[Financial News] LIG Defense & Aerospace (LIG D&A)’s exports rose in the third quarter of this year as sales from mass production of Cheongung-II began to come in from Saudi Arabia as well as the United Arab Emirates (UAE). However, profitability fell by nearly 25% from a year earlier as domestic mass-production sales declined and expenses, including research and development and labor costs, increased.
LIG D&A disclosed on the 6th that it had provisionally posted consolidated revenue of 1.0713 trillion won and operating profit of 67.6 billion won for the third quarter of this year. Revenue rose 2.1% from a year earlier, while operating profit fell 24.6%. Operating profit per 100 won of revenue dropped to 6.3 won from 8.5 won in the same period last year.
Exports to the Middle East supported revenue. Cheongung-II, a medium-range surface-to-air guided weapon, generated about 80 billion won in revenue from the UAE project and about 20 billion won from the Saudi project. The Saudi project entered mass production this quarter. Total export revenue rose 16.2% from a year earlier to 217.4 billion won.
Domestic revenue was similar in scale to last year, but the businesses generating it changed. Mass-production revenue fell from 664.8 billion won to 591.4 billion won, while research and development revenue rose from 197.3 billion won to 262.4 billion won. LIG D&A cited the increased share of research and development projects and higher selling, general and administrative expenses as factors behind the decline in operating profit. It also recorded about 9 billion won in provisions for losses and about 10 billion won in operating losses related to U.S. robotics company Ghost Robotics.
Net income turned into a net loss of 8.2 billion won, compared with a profit of 54.2 billion won in the same period last year. The company said a decline in exchange rates resulted in foreign-exchange transaction and valuation losses. It also said it recorded a one-off impairment loss of about 22 billion won on tangible assets as it demolished existing facilities to expand its production facility in Gumi.
Operating profit for the first three quarters of this year totaled 344.3 billion won, up 22.6% from the same period last year. The order backlog at the end of the third quarter stood at 24.54 trillion won, similar to the previous quarter. Of that, the backlog for Cheongung-II projects in the UAE, Saudi Arabia and Iraq was 10.03 trillion won, accounting for about 41% of the total.
[email protected] Jung Won-il Reporter