LIG Defense&Aerospace (079550) Q3 2024 earnings summary

Executive summary

• LIG Nex1 is a leading defense system integrator specializing in advanced weapon systems and military-grade electronics, with a diversified portfolio across Army, Navy, and Air Force sectors.

• Revenue for the first nine months of 2024 was ₩2,108.5 billion, down 8.7% year-over-year, with operating income at ₩168.1 billion and net income at ₩149.2 billion, both declining from the previous year.

• Core competencies include strong R&D capabilities, with 58.7% of employees in R&D and nearly half holding advanced degrees.

• Export sales increased to 26.4% of total revenue, up from 15.5% in the prior year, while domestic sales declined.

• The company completed the acquisition of Ghost Robotics Corporation and expanded investments in R&D and production infrastructure.

Financial highlights

• FY2024 3Q sales reached KRW 2,108.5 billion (accumulative), with operating income at KRW 168.1 billion and net income at KRW 149.2 billion.

• EBITDA for FY2024 3Q accumulative was KRW 230.5 billion.

• Gross profit for FY2024 3Q accumulative was KRW 306.6 billion, with COGS at KRW 1,802.0 billion.

• Total assets increased to KRW 5,804.2 billion as of FY2024 3Q, with equity at KRW 1,172.0 billion.

• EPS for FY2024 3Q was ₩6,847, down from ₩8,028 year-over-year.

Outlook and guidance

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

• More than 50% of the backlog is export-related, with expectations to maintain a backlog 3–4 times annual sales over the next five years.

• The company expects continued growth in export markets, especially in the Middle East and Asia.

• Domestic growth is supported by a rising Force Improvement Program budget, with company sales representing over 10% of this budget in 2023.

• Overseas market opportunities are expanding due to heightened geopolitical tensions and global military modernization.