South Korean defence firms report strong Q3 earnings
Seoul: South Korea’s major defence firms have posted robust revenues and profits for the third quarter, led by massive arms export deals, industry data showed on Sunday.
The combined operating profits of four major South Korean defence firms — Hanwha Aerospace Co., Korea Aerospace Industries (KAI), Hyundai Rotem Co. and LIG Nex1 Co. — were estimated at 753.8 billion won ($546 million) for the July-September period, according to the data from regulatory filings and financial reports.
The figure more than trebled from 233.3 billion won recorded in the same period last year. Their combined revenues totalled an estimated 5.4 trillion won, up 30.9 percent on-year from 4.1 trillion won, reports Yonhap news agency.
Industry leader Hanwha Aerospace posted 477.2 billion won in operating profit for the third quarter, up sharply from 85.6 billion won a year ago. Its sales soared 61.9 percent on-year to 2.6 trillion won.
The strong bottom line is attributable to its exports of K9 howitzers and Chunmoo rocket launchers to Poland.
The company secured a deal, valued at 8.2 trillion won, to supply Poland with hundreds of K9 howitzers and Chunmoo rocket launchers in 2022. This was followed by another contract last year, worth 5.6 trillion won.
It has an order backlog of nearly 30 trillion won.
Hanwha Aerospace expected strong results to continue in the coming quarters thanks to new contracts including one with Romania worth 1.3 trillion won.
Hyundai Rotem reported 1.1 trillion won in sales for the third quarter, up 18 percent from a year ago, while its operating profit more than tripled to 137.5 billion won.
The robust performance came as the company clinched a deal to export 1,000 K2 main battle tanks to Poland two years ago.
Its order backlog came to 19 trillion won.
KAI’s third-quarter sales fell 9.9 percent on-year to 907.2 billion won, but its operating profit rose 16.7 percent to 76.3 billion won.
Several successful arms deal, including the planned supply of the FA-50PL light fighters to Poland and the FA-50M light combat aircraft to Malaysia, contributed to the company’s solid earnings.
KAI’s order backlog reached 22.4 trillion won.
LIG Nex1 is forecast to see its sales jump 35.9 percent on-year to 728.3 billion won and its operating profit soar 52.8 percent to 62.8 billion won, with an order backlog of 19 trillion won.
