Hanwha Group's Q3 Revenue Rises Slightly to 16.7 Trillion Won Despite a Pause at Hanwha Aerospace

[Financial News] Hanwha Group posted consolidated revenue of 1.6768 trillion won in the third quarter. It edged up slightly from a year earlier despite a pause caused by delayed revenue recognition at Hanwha Aerospace.
According to the quarterly report Hanwha Group disclosed on the 12th, consolidated revenue in the third quarter was 1.6768 trillion won, up 4.8 billion won from the same period last year. That was a solid showing given that revenue at Hanwha Aerospace, a major player in the defense sector, fell 6% year on year to 6.0943 trillion won and that Hanwha Corporation's construction division performed poorly.
Operating profit fell sharply by about 900 billion won year on year to 368.2 billion won. This appears to reflect a 46% plunge in Hanwha Aerospace's operating profit over the same period, even though its revenue declined only slightly. However, cumulative operating profit for the first three quarters reached 3.9601 trillion won, about 300 billion won more than a year earlier. The group has only slowed in the third quarter; overall, it is showing a growth trend.
The pause this quarter also appears to be a temporary gap caused by the simultaneous early delivery of equipment from Hanwha Aerospace's land defense division and delays in deliveries. A second batch of K9s and Chunmoo systems is scheduled to be delivered to Poland in the fourth quarter, while K9 projects in Egypt and Australia are ramping up, making strong results virtually certain.
Polish deliveries in particular are expected to be somewhat higher than anticipated. Kim Cheol-hong, head of finance at Hanwha Aerospace, said during a conference call that day, "We expect to deliver at least 30 K9s to Poland this year, and at least 60 Chunmoo launchers, up from the 40 estimated at the beginning of the year."

Hanwha Ocean, Hanwha Systems, Hanwha Vision and Hanwha General Insurance are among the affiliates continuing to post strong results. Hanwha Group is likely to end the year with a clear rise in its annual consolidated results. Hanwha Ocean posted third-quarter operating profit of 485.7 billion won, up 67%, while operating profits at Systems, Vision and General Insurance also rose sharply into the 100-billion-won range.
Hanwha Ocean has secured high-priced orders, mainly for liquefied natural gas (LNG) vessels, bolstering its outlook, including the prospect of exceeding 2 trillion won in operating profit this year. Expectations are also high for a potential U.S. Navy order for Ulsan-class Batch-III (Chungnam-class) frigates and for the nuclear-powered submarine program backed by the government. During a conference call, Hanwha Ocean announced the creation of the Jangbogo M Development Team, a dedicated unit for the nuclear-powered submarine program.
Hanwha Systems stands to benefit from mass production of the Korean fighter jet KF-21. The company produces the active electronically scanned array (AESA) radar and avionics installed on the KF-21. Korea Aerospace Industries (KAI) expects KF-21 sales to exceed 14 trillion won over the next 10 years. As demand for counter-drone systems grows, the Cheongwang laser-based anti-aircraft weapon is emerging as a future growth driver, while the company is also expanding its space business, including development of ultra-high-resolution synthetic aperture radar (SAR) satellites.
Hanwha Vision's profitability improved significantly as a sharp rise in demand for video surveillance equipment pushed up prices for high-value products such as artificial intelligence (AI) cameras. Its semiconductor equipment business, which it is developing as a future growth driver, has also begun to turn a profit and is expected to accelerate its growth. In particular, revenue from panel-level packaging (PLP) equipment, which increases the number of semiconductor packages that can be processed, has shown notable growth.


[email protected] Kim Yun-ho Reporter