The combined operating profit of major domestic defense corporations Hanwha Aerospace, Hyundai Rotem, LIG Nex1, and Korea Aerospace Industries (KAI) is expected to exceed 2 trillion won in the first half of this year. They surpassed the 2 trillion won mark for the first time last year with an annual operating profit of 2.6527 trillion won, and they are nearing last year's total performance in just the first half of this year.
According to financial information provider FnGuide on the 10th, the combined operating profit forecast for these four companies in the first half is 2.0284 trillion won. This figure represents a 142% increase compared to the same period last year (836.7 billion won). A defense industry official noted, "With overseas deliveries and domestic production volumes, it is possible that this year's operating profit could surpass 4 trillion won."
The company experiencing the most rapid growth is Hanwha Aerospace. It is expected to record a revenue of 6.2618 trillion won and an operating profit of 696.3 billion won in the second quarter. Compared to the same period last year, revenue is up 124.8% and operating profit is up 94.1%.
Hanwha Aerospace recorded a revenue of 5.4842 trillion won and an operating profit of 560.8 billion won in the first quarter. Deliveries of K9 self-propelled howitzers and Chunmu systems to Poland are ongoing, and exports of propellants to the UK and Sweden are also continuing. This is due to increased ammunition demand in Europe following the Russia-Ukraine war. Some of the quantities delivered to the Korean military are also included.
In 2022, a contract was signed with the United Arab Emirates (UAE) for the export of the medium-range surface-to-air missile Chungho (M-SAM) II, which began to be recognized as part of the performance from the second quarter of this year. Deliveries of Chungho II to the UAE are expected to begin in earnest next month.
Hyundai Rotem is expected to achieve a revenue of 1.3841 trillion won and an operating profit of 232.5 billion won in the second quarter. Compared to a year ago, revenue has increased by 26.5%, and operating profit has grown by 106.1%. The anticipated rise in performance is attributed to deliveries of K2 tanks to Poland. The first contract quantity in 2022 was 180 units, and by June of this year, a total of 133 units have been delivered. So far this year, 49 units have been delivered to Poland, with 47 units remaining.
LIG Nex1's projected performance for the second quarter is a revenue of 883.4 billion won and an operating profit of 83.1 billion won, which represent increases of 46.1% and 69%, respectively, compared to the previous year. The influence stems from domestic production and deliveries centered around guided missiles like Chungho II. LIG Nex1's growth is backed by exports to the UAE. In 2022, LIG Nex1 signed a contract with Hanwha Aerospace for the export of Chungho II to the UAE, with a total contract size of 4.1 trillion won; LIG Nex1's portion of the contract was 2.34 trillion won for system development.
KAI is expected to see a decline in performance compared to a year ago in the second quarter. The forecast for the second quarter projects revenue at 891.4 billion won and operating profit at 68.6 billion won, down 0.08% and 8.77%, respectively. The delay in large-scale deliveries of the FA-50 multi-role fighter to Poland has contributed to this downturn. However, if deliveries continue, including the mass production of the next-generation fighter KF-21 and the signing of an additional contract for 12 FA-50s with the Philippines, the performance is expected to rise.