Four Leading South Korean Defense Firms Anticipate Strong Q1 Earnings
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Synopsis
South Korea's leading defense firms are poised to report strong earnings for Q1, driven by increased orders and robust global demand. A recent survey indicates a significant rise in profits and sales for KAI, Hanwha Aerospace, Hyundai Rotem, and LIG Nex1.
Key Takeaways
- South Korea's top defense firms anticipate strong Q1 results.
- KAI, Hanwha Aerospace, Hyundai Rotem, and LIG Nex1 show significant profit increases.
- Global demand for South Korean defense products is on the rise.
- Investment plans aim to position Hanwha Aerospace as a global leader.
- Growing international orders boost overall sales and profitability.
Seoul, April 20 (NationPress) South Korea's top four defense companies are projected to announce strong earnings for the first quarter of the year due to a rise in orders, a recent survey indicated on Sunday.
The four firms -- Korea Aerospace Industries Co. (KAI), Hanwha Aerospace Co., Hyundai Rotem Co., and LIG Nex1 Co. -- are anticipated to report a total operating profit of 657 billion won (approximately US$461 million) for the first quarter, a significant increase from 197.1 billion won in the same period last year, according to a survey conducted by local brokerages and reported by Yonhap Infomax, the financial news division of Yonhap News Agency.
Their combined sales are expected to surge by 24.5 percent year-on-year to reach 5.1 trillion won, the survey revealed. Hanwha Aerospace is likely to emerge as the top performer among these four companies.
Its operating profit is forecasted to jump to 328.7 billion won in the March quarter, up from 37.4 billion won a year earlier, while sales are set to increase by 14.7 percent year-on-year to 2.12 trillion won.
The increase in Hanwha Aerospace's first-quarter outlook is driven by strong international demand for its key products, including the K-9 self-propelled howitzer and Chunmoo multiple launch rocket system, according to brokerage firms.
The global appetite for South Korean defense products has been climbing amid the ongoing Russia-Ukraine conflict, rising tensions in the Middle East, and the strategic competition between the United States and China.
To capitalize on this demand, Hanwha Aerospace announced last month plans to invest 11 trillion won over four years up to 2028 to establish itself as a global leader in the defense sector.
The company aims for an operating profit of 10 trillion won on sales of 70 trillion won by 2035.
With strong demand for its K2 Black Panther battle tank, Hyundai Rotem is expected to report an operating profit of 201 billion won in the first quarter, a significant increase from 44.68 billion won a year prior.
Sales are projected to rise 71.3 percent year-on-year to 1.28 trillion won, up from 747.78 billion won.
KAI, the only aircraft manufacturer in the country, is expected to announce an operating profit of 57.3 billion won, which is a 19.4 percent increase from the previous year. Sales are anticipated to climb 9.6 percent to 811 billion won.
KAI believes that its earnings will improve in the latter half of the year as it aims to secure 8.5 trillion won in new orders for aircraft, including the FA-50 light attack aircraft and Surion utility helicopter, in markets such as the Philippines and the Middle East.
