[Click eStock] "Hanwha Aero, Profitability Improvement Expected"

Korea Investment & Securities forecasted on the 2nd that Hanwha Aerospace's profitability will improve quarter by quarter.

Hanwha Aerospace recorded sales of 1.8483 trillion KRW and an operating profit of 37.4 billion KRW in the first quarter of this year. These figures represent decreases of 13.9% and 82.8%, respectively, compared to the same period last year. The operating profit was 73.3% below market expectations.

Researcher Jang Nam-hyun of Korea Investment & Securities explained, "This was due to the low profit margin in the ground defense sector," adding, "Domestic sales had a high proportion of development projects with lower profit margins compared to mass production." He continued, "Overseas sales consisted of auxiliary equipment rather than main systems, resulting in low profitability," and added, "There was a one-time cost of 10 billion KRW for the re-delivery of K9 to the military."

Hanwha Aerospace is estimated to achieve consolidated sales of 11.028 trillion KRW and an operating profit of 929 billion KRW this year. These figures represent increases of 17.8% and 34.4%, respectively, compared to last year.

Researcher Jang analyzed, "This year's performance improvement will be driven by sales in Poland," and stated, "The annual delivery schedule of more than 60 K9 units and over 30 Chunmoo units remains unchanged." He also noted, "Since there were no sales in Poland in the first quarter, sales in other quarters will increase," and predicted, "Profitability will improve sharply as the quarters progress."

He emphasized, "The momentum for export growth continues," and said, "Following the announcement of an additional contract for Chunmoo in Poland, confirming Poland's purchasing intent, additional contracts for K9 will also be signed." He added, "We also expect the signing of a K9 export contract to Romania within the year," and expressed hope that "exports of Redback to Romania will also be possible."