Hanon Systems (A018880) Q2 2024 earnings summary

Executive summary

• Revenue grew 5.4% year-over-year in 2Q 2024, driven by favorable currency effects despite lower-than-expected volume.

• Net income declined to a loss of KRW 31B due to increased net interest expense and significant FX impacts.

• XEV (electrified vehicle) revenue ratio remained at ~24%, with expectations for improvement from new BEV launches.

• New business wins are on track, with key programs scheduled for the second half of 2024.

Financial highlights

• 2Q 2024 revenue: KRW 2,560B (+5.4% YoY, +6.5% QoQ); 1H 2024 revenue: KRW 4,965B (+4.1% YoY).

• 2Q 2024 EBITDA: KRW 235B (-18.8% YoY); margin 9.2%. Operating income: KRW 72B (-50.1% YoY); margin 2.8%.

• 2Q 2024 net income: -KRW 31B (down from +KRW 111B YoY), margin -1.2%.

• 1H 2024 net income: -KRW 21B (down from +KRW 156B YoY), margin -0.4%.

• COGS as % of sales increased to 90.9% in 2Q 2024 (from 88.3% YoY).

Outlook and guidance

• Margins expected to improve in 2H 2024 based on cost actions and new program launches.

• Logistics costs targeted to remain under 3% of sales in 2H 2024 despite global supply chain disruptions.

• XEV revenue ratio expected to rise with new BEV launches.