LIG Defense&Aerospace (079550) Q2 2024 earnings summary

Executive summary

• LIG Nex1 is a leading defense system integrator specializing in advanced weapon systems and military-grade electronics, serving Army, Navy, and Air Force clients with a broad product portfolio.

• Revenue for H1 2024 was ₩1,368.2 billion, down from ₩2,308.6 billion in H1 2023, reflecting a significant year-over-year decrease.

• The company emphasizes R&D, with 57.5% of its workforce in R&D roles and over half holding advanced degrees.

• Operating income for H1 2024 was ₩116.1 billion, compared to ₩186.4 billion in H1 2023.

• The company maintained a strong order backlog of ₩19,005.3 billion as of June 30, 2024.

Financial highlights

• FY2024 2Q sales reached KRW 604.7 billion, with accumulative sales at KRW 1,368.2 billion.

• Operating income for FY2024 2Q was KRW 49.1 billion, and net income was KRW 45.7 billion.

• EBITDA for FY2024 2Q stood at KRW 67.7 billion.

• Gross margin for H1 2024 was 14.5%, slightly lower than the previous year.

• Total assets increased to ₩4,867.5 billion from ₩3,815.8 billion at year-end 2023.

Outlook and guidance

• Order backlog as of Dec. 2023 was KRW 19.6 trillion, about 8.5 times FY23 sales, supporting stable growth.

• Expectation to maintain backlog at 3–4 times annual sales for the next five years.

• The company continues to focus on expanding its defense export business, with major contracts in the Middle East and Asia.

• Ongoing investments in R&D and production infrastructure are expected to support future growth.

• Management expects stable domestic demand and aims to increase overseas sales.