Hanwha Aerospace (012450) Q3 2024 earnings summary

Executive summary

• Q3 2024 saw a 62% year-over-year sales increase to KRW 2.63 trillion, with operating profit up more than fivefold to KRW 477.2 billion, driven by Land Systems and Hanwha Systems.

• Net profit reached KRW 330.4 billion, reversing a prior-year loss, reflecting improved profitability and operational leverage.

• Major contracts were signed in Land Systems (K9 SPH with Romania) and Hanwha Systems (M-SAMII MFR Radar with Saudi Arabia), and Hanwha Vision and Hanwha Precision Machinery were spun off as discontinued operations.

• Revenue and operating profit also grew year-over-year in Defense and ICT, though sequential declines occurred due to delivery schedules and business exits.

• Investments in Q3 2024 focused on UAM, satellite, and digital platform sectors.

Financial highlights

• Q3 2024 sales were KRW 2,631 billion (+62% YoY), operating profit KRW 477 billion (+458% YoY), and net profit KRW 330 billion (up from 7 billion YoY); operating margin improved to 18.1%.

• Pretax profit turned positive at KRW 375.2 billion, and net profit margin improved to 12.6%.

• Total assets at quarter-end were KRW 20.92 trillion, with liabilities at KRW 16.69 trillion and net debt at KRW 4.28 trillion.

• Debt ratio rose to 130% at Q3 2024, with borrowings reaching KRW 3,792 billion.

• Operating profit margin improved to 8.9% year-over-year.

Segment performance

• Land Systems sales rose 117% YoY, with operating profit up 715% YoY, driven by export and domestic demand.

• Hanwha Systems Q3 sales were KRW 1.66 trillion, more than doubling YoY, with operating profit at KRW 439.9 billion.

• Aerospace segment sales rose 22% YoY to KRW 477.9 billion, but operating profit was negative due to higher GTF engine-related losses.

• Defense revenue rose KRW 84 billion YoY to KRW 4,678 billion; ICT revenue increased KRW 83 billion YoY to KRW 1,696 billion.

• Setrec Eye sales grew 75% YoY to KRW 43.7 billion, with a turnaround to KRW 0.8 billion in operating profit.