Defence firms report strong H1 earnings on large export deals in S. Korea

Seoul, Aug 17 (IANS) South Korea's major defence firms reported record earnings in the first half of the year on the back of massive arms export deals, industry data showed on Sunday.

The combined operating profits of five leading defence firms -- Hanwha Aerospace Co., LIG Nex1 Co., Korea Aerospace Industries (KAI), Hyundai Rotem Co. and Hanwha Systems Co. -- reached 2.3 trillion won for the January-June period, up 161.2 percent from 880.7 billion won a year ago, according to the data from regulatory filings and financial reports.

The figure already represents 79.9 percent of their full-year operating profit of 2.88 trillion won in 2024, reports Yonhap news agency.

Their combined sales nearly doubled to 19.2 trillion won from 9.9 trillion won a year earlier.

Industry leader Hanwha Aerospace posted a record 1.43 trillion-won operating profit for the first half, quadrupling from 355 billion won, while its sales more than tripled to 11.8 trillion won.

LIG Nex1's operating profit soared 64.6 percent on-year to 191.2 billion won for the six-month period, with its sales jumping 35.4 percent to 1.9 trillion won.

KAI posted 132 billion won in operating profit, up 7.9 percent, but its sales fell 6.4 percent to 1.5 trillion won.

Hyundai Rotem saw its operating profit surge 192.4 percent on-year to 460.4 billion won, with 2.6 trillion won in sales, up 40 percent.

Hanwha Systems, meanwhile, reported a 29.5 percent drop in operating profit to 91.6 billion won, but sales rose 18.4 percent to 1.5 trillion won.

Industry officials attributed the robust first-half results to strong overseas demand amid heightened geopolitical risks in the Middle East and Europe.

Hanwha Aerospace saw its second-quarter overseas sales jump 43 percent from a year earlier, buoyed by increased exports of defense systems, such as the Chunmoo multiple rocket launcher.

Hanwha Systems' second-quarter sales rose 11.8 percent, boosted by deliveries of multi-function radars (MFR) used in the Cheongung-II medium-range surface-to-air missile system to the United Arab Emirates and Saudi Arabia.

KAI posted 227.3 billion won in overseas sales for the second quarter due to exports of FA-50 fighter jets to Poland and Malaysia.

With a combined order backlog of 111.9 trillion won, market watchers expect the defence firms' growth momentum to continue in the second half.

"With continuous overseas orders for flagship products and deliveries, we have a positive outlook for the second half of the year and beyond," an industry official said on condition of anonymity.

—IANS

na/