Hanwha Corporation (A000880) Q2 2024 earnings summary

Executive summary

• Consolidated sales rose 4% year-over-year to KRW 12,993Bn, driven by defense and financial subsidiaries.

• Operating profit increased 14% year-over-year to KRW 529Bn, with financial subsidiaries showing strong growth.

• Net profit dropped sharply by 90% year-over-year to KRW 37Bn, turning to a deficit sequentially.

• Revenue for the first half of 2024 was ₩25,428.1 billion, with an operating profit of ₩764.3 billion and a net loss of ₩184.3 billion, reflecting a significant decline from the previous year.

• The group completed major business portfolio restructuring, including divestitures and the establishment of a new subsidiary for the momentum division.

Financial highlights

• Separate revenue declined 13.8% year-over-year to KRW 1,557Bn; operating profit turned to a deficit of KRW -22Bn.

• Net income (separate) remained negative at KRW -65Bn, a deeper loss than last year.

• Gross profit (separate) fell to KRW 81Bn from KRW 167Bn year-over-year.

• Revenue decreased 52.1% year-over-year, primarily due to the exclusion of divested businesses and lower sales in key segments.

• The financial segment contributed ₩13,788.5 billion in revenue, with insurance and asset management remaining stable.

Outlook and guidance

• Non-financial: Defense backlog remains steady; solar module sales expected to recover.

• Financial: Targeting over KRW 2Tn in new contract CSM, focus on profit growth via CSM/RA amortization.

• Management expects improved profitability in the second half of 2024 as restructuring costs subside and the group focuses on core businesses.

• The company will continue to optimize its business portfolio, invest in high-growth areas, and strengthen risk management.

• E&C: Focus on managing existing projects and expanding green infra EPC.