The indiscriminate tariff imposed by U.S. President Donald Trump continues to cause anxiety within the domestic industry; however, defense corporations are expected to record strong performances in the first quarter of this year. Although some corporations may see a slight decline in operating profit, analyses suggest that this is solely due to last year's exceptionally good results, and that the growth trend will continue throughout this year.
According to FnGuide, a financial information provider, Hanwha Aerospace's sales forecast for the first quarter of this year is expected to be 4.3963 trillion won, a 137.8% increase compared to the same period last year, while the operating profit estimate is 476.3 billion won, a 1173.1% increase.
Hanwha Aerospace recorded an earnings shock last year in the first quarter because the delivery of the K9 self-propelled howitzer and the Cheonmu multi-launch rocket, which accounted for 70% of its total sales at the time, did not occur.
Hanwha Aerospace's K9 self-propelled howitzers and Cheonmu are being continuously delivered to Poland. In December 2021 and February 2022, Hanwha Aerospace signed export contracts for K9 self-propelled howitzers with Australia and Egypt, and under these contracts, deliveries are set to proceed, leading to positive performance expectations this year. The revenue from the Redback export contract signed with Australia in 2023 will further enhance performance.
There are high expectations in the market for Hyundai Rotem's first-quarter performance. FnGuide forecasts that Hyundai Rotem's sales in the first quarter are expected to reach 1.2795 trillion won, a 71% increase compared to the same period last year, while operating profit is predicted to rise 316% to 186.3 billion won.
Hyundai Rotem is currently delivering K2 tanks to Poland as scheduled. The total quantity of K2 tanks that Hyundai Rotem needs to deliver to Poland this year is 96 units. Additionally, the rail division (Rail Solutions) is expected to turn a profit from the electric train contract worth 2.2 trillion won signed with Morocco last February.
Korea Aerospace Industries (KAI) is expected to record sales of 889.8 billion won in the first quarter, a 20.2% increase compared to the same period last year, while operating profit is projected to rise 39.4% to 67 billion won. Although there are no aircraft immediately to be supplied to Poland or Malaysia, with whom export contracts for the FA-50 have been signed, 36 upgraded FA-50PL (Poland) aircraft tailored to Poland's requirements must be delivered by 2028. It is also anticipated that the performance will significantly increase if the contract with Iraq for the Surion is carried out.
LIG Nex1's sales for the first quarter are expected to increase by 6% to 812.3 billion won compared to the same period last year, but operating profit is predicted to drop 1.6% to 65.9 billion won. However, with a backlog of orders as of the end of last year totaling 20.0531 trillion won, which is the highest level ever, assessments indicate that growth will continue this year.
LIG Nex1 is in the process of domestic production of the ballistic missile interception system Cheongung-II (M-SAM) and is also delivering next-generation military radios (TMMR·Tactical Multiband Multirole Radio). The export contract for radios signed with the Indonesian military and police in 2006 is scheduled to continue until this year.
LIG Nex1 has signed supply contracts for Cheongung-II with the United Arab Emirates (UAE·3.7 trillion won) in 2022, Saudi Arabia (4.25 trillion won) in 2023, and Iraq (3.7 trillion won) in 2024, and performance will be reflected gradually as deliveries begin.