Hanwha Systems (272210) Q1 2026 earnings summary

Executive summary

• Revenue increased 17% year-over-year in Q1 2026 to KRW 807.1 billion, driven by higher export and mass production in Defense and captive sales in ICT.

• Operating profit rose 2% year-over-year to KRW 34.3 billion, with margin improvement to 4.3%.

• Net profit turned negative, with a net loss of KRW 54.98 billion attributable to owners, impacted by discontinued operations and financial costs.

• Major discontinued operations included closure of Point Exchange and Gig Worker services due to profitability concerns.

• Significant developments include a joint research center for defense semiconductors and participation in the U.S. Navy NGLS program.

Financial highlights

• Consolidated revenue: KRW 807.1 billion (+17% YoY), operating profit: KRW 34.3 billion (+2% YoY).

• Gross profit margin improved to 13.4% from 12.6% year-over-year.

• EBIT and net profit both negative, with net profit margin at -11.9%.

• Cash and cash equivalents rose to KRW 492.6 billion from KRW 325.5 billion at year-end 2025.

• R&D expenses for Q1 2026 were KRW 125.8 billion, representing 15.6% of sales.

Outlook and guidance

• Dividend policy for 2025–2027 targets a minimum payout of KRW 350 per share, with 2025 planned at KRW 500 per share.

• Focus on stable and predictable shareholder returns, including periodic policy announcements.

• Defense segment backlog remains robust, with a total order backlog of KRW 13 trillion.

• Management expects continued growth in defense exports and ICT digital transformation projects.

• No changes to dividend policy or major capital allocation plans were announced.