Hanwha Systems (272210) Q2 2024 earnings summary

Executive summary

• Revenue and operating profit rose year-over-year, driven by export programs in Defense and increased ICT sales to affiliates and external clients.

• The company operates in three main segments: Defense, ICT, and New Businesses, with a strong focus on defense electronics, IT system integration, and emerging areas like UAM and satellite communications.

• Major contracts signed for AESA radar production, joint radar development, and international defense supply.

• The defense segment remains the largest contributor, accounting for over 71% of sales, followed by ICT at 28% and new businesses at 0.5%.

Financial highlights

• 2Q24 revenue: KRW 6,873Bn, up KRW 766Bn YoY and KRW 1,429Bn QoQ.

• Operating profit: KRW 798Bn, up KRW 499Bn YoY and KRW 405Bn QoQ.

• Net profit: KRW 271Bn, down KRW 476Bn YoY and KRW 232Bn QoQ.

• Debt ratio: 128% at end-2Q24, up 20% from end-2023.

• Total assets: KRW 50,112Bn (+5,280Bn from end-2023); equity: KRW 21,982Bn (+441Bn from end-2023).

Outlook and guidance

• Future projections are subject to market conditions and internal/external uncertainties.

• The company is expanding its new business portfolio, including UAM, satellite communications, and digital platforms, aiming for future growth.

• Continued investment in R&D and strategic partnerships in global defense and ICT markets are expected.