Hanon Systems (A018880) Q1 2025 earnings summary

Executive summary

• Revenue grew 8.9% year-over-year to KRW 2,617B, driven by favorable FX, higher sales volume, and strong sales to major OEMs, especially Hyundai, Hyundai Mobis, and Ford.

• Operating profit margin dropped to 0.8% (KRW 21B), a significant decline from KRW 95.5B in Q1 2024, due to changes in R&D capitalization and increased D&A.

• Net income turned negative at KRW -24.0B, impacted by net interest expense and other below-the-line items.

• Gross margin compressed due to higher cost of sales and increased finance costs.

• XEV revenue ratio reached 27% in 1Q25, with expectations to hit 30% for the full year.

Financial highlights

• Revenue: KRW 2,617.3B (+8.9% YoY, +3.2% QoQ).

• EBITDA: KRW 191B (-14.2% YoY, +493.5% QoQ); margin 7.3%.

• Operating profit: KRW 21.1B (-68.5% YoY); margin 0.8%.

• Net income: KRW -24.0B (vs. KRW 10B YoY); margin -0.9%.

• Cash and cash equivalents at quarter-end were KRW 853.2B, down from KRW 1,346.5B at the end of 2024.

Outlook and guidance

• XEV revenue ratio expected to reach ~30% in 2025, supported by new BEV launches.

• Profitability improvement anticipated through re-win orders and operational efficiency.

• Ongoing cost management and restructuring to address elevated COGS.

• Management expects operational improvement and aims to resume dividends as soon as financial performance allows.

• No dividend was declared for 2024 due to net losses; future payouts depend on earnings recovery.