Hanon Systems (A018880) Q3 2025 earnings summary

Executive summary

• Revenue for the first nine months of FY2025 was KRW 8,181.2 billion, up 9.6% year-over-year, with 3Q 2025 revenue at KRW 2,705.7 billion, up 8.2% YoY, driven by higher sales volume, tariff recovery, and favorable FX effects.

• Operating profit margin improved to 3.5% in 3Q 2025, with operating income for the first nine months at KRW 180.7 billion, an 89.2% increase from the prior year.

• Net income attributable to owners was KRW 14.3 billion, reversing a loss of KRW 363.3 billion in the prior year, with 3Q 2025 net income at KRW 55.3 billion (adj. 93.6B).

• XEV (electric vehicle) revenue ratio reached 28% for the quarter, with full-year expectations at a similar level.

• The company operates a single business segment focused on automotive thermal management systems, with major customers including Hyundai, Hyundai Mobis, and Ford.

Financial highlights

• 3Q 2025 revenue: KRW 2,705.7B, up 8.2% YoY; operating profit: KRW 95.3B (adj. 133.6B); net income: KRW 55.3B (adj. 93.6B).

• EBITDA margin improved to 10.4% (adj. 11.9%) from 10.2% YoY; gross margin for the period was 8.9%, up from 7.5% in the prior year.

• Cash and cash equivalents at period end were KRW 774.6 billion, down from KRW 1,346.5 billion at the end of FY2024.

• Total assets stood at KRW 10,562.4 billion, with total liabilities of KRW 7,506.8 billion and equity of KRW 3,055.6 billion.

• Cost of goods sold ratio declined to 89.4% (adj. 89.0%) of sales, reflecting ongoing cost-saving initiatives.

Outlook and guidance

• Gradual profit improvement expected, supported by increased volume, FX effects, and expansion in the electric and hybrid vehicle market.

• Full-year XEV revenue ratio expected at ~28%, reflecting IRA termination and new EV launches.

• Dividend resumption is under review, contingent on further improvement in profitability and cash flow.

• SG&A expected to stabilize with continued cost control.