Hanwha Aero, Defense Export Boom Drives 65% Increase in Q3 Operating Profit

Hanwha Aerospace announced on the 31st that its consolidated sales for the third quarter reached 1.9815 trillion KRW, a 31% increase compared to the same period last year, and operating profit rose 65% to 104.3 billion KRW.

The net loss for the period was 3.6 billion KRW due to one-time costs reflected in the private aircraft engine business.

This includes a one-time loss provision of 156.1 billion KRW corresponding to the 2% business participation rate due to potential defects in the GTF engine developed in participation with global aircraft engine manufacturer P&W (Pratt & Whitney) under the 'RSP (Risk and Revenue Sharing Program)'. RSP is a partnership contract that shares profits and risks from the aircraft engine development stage through production, sales, and maintenance.

The defense business recorded sales of 762.7 billion KRW and operating profit of 53.6 billion KRW, increasing 117% and 483% respectively compared to the same period last year, as domestic and export volumes increased and the performance of Hanwha Defense Co., Ltd., merged in April, was included. Exports rose 177% from 71.4 billion KRW in the second quarter to 197.5 billion KRW due to increased global weapons demand, driving the rise in sales and profits.

The aviation business posted sales of 390.2 billion KRW, up 19% from the same period last year, while operating profit decreased 72% to 4.2 billion KRW.

A Hanwha Aerospace official stated, "With the increase in global defense demand, orders are expected to grow in the fourth quarter mainly in Europe and the Middle East, and existing export volume performance will be fully reflected. The increase in new aircraft orders is also expected to improve the performance of the aviation business."