4 major defense firms set to report robust results in Q1
South Korea's four major defense industry companies are estimated to report robust earnings results for the first three months of the year on increased orders, a survey showed Sunday.
The four defense firms -- Korea Aerospace Industries Co., Hanwha Aerospace Co., Hyundai Rotem Co. and LIG Nex1 Co. -- are expected to report a combined operating profit of 657 billion won ($461 million) in the first quarter, compared with 197.1 billion won posted in the first quarter of last year, according to a survey of local brokerages conducted by Yonhap Infomax, the financial news arm of Yonhap News Agency.
Their combined sales are projected to jump 24.5 percent on-year to 5.1 trillion won, the survey showed.
Hanwha Aerospace is expected to be the best performer among the four majors.
Its operating profit is estimated to soar to 328.7 billion won in the March quarter from 37.4 billion won a year ago, while sales will jump 14.7 percent on-year to 2.12 trillion won.
Strong overseas demand for its mainstay products, including the K-9 self-propelled howitzer and Chunmoo multiple launch rocket system, drove up Hanwha Aerospace's first-quarter outlook, according to brokerages.
Global demand for Korean-made defense products has been on the rise amid the prolonged Russia-Ukraine war, escalating conflicts in the Middle East and the strategic rivalry between the United States and China.
To meet such a demand, Hanwha Aerospace said last month it will invest 11 trillion won for four years through 2028 to become a global top-tier player in the defense industry.
It aims to achieve an operating profit of 10 trillion won on sales of 70 trillion won in 2035.
Helped by strong demand for its K2 Black Panther battle tank, Hyundai Rotem looks set to post an operating profit of 201 billion won in the first quarter, soaring from 44.68 billion won a year ago.
Its sales are set to jump 71.3 percent on-year to 1.28 trillion won from 747.78 billion won.
KAI, the country's sole aircraft manufacturer, is forecast to report an operating profit of 57.3 billion won, up 19.4 percent from a year ago. Its sales are set to rise 9.6 percent to 811 billion won.
KAI expects its earnings will improve in the second half as it aims to receive 8.5 trillion won in fresh orders to build aircraft, including the FA-50 light attack aircraft and the Surion utility helicopter, in countries like the Philippines and the Middle East. (Yonhap)
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