Seoul: South Korean defense giant Hanwha Aerospace Co. announced its ambitious goal to achieve 30 trillion won (US$20.4 billion) in sales this year, driven by robust global demand for defense equipment and a favorable exchange rate due to the weak Korean won. This target is nearly triple the 11.2 trillion won in sales recorded by the company in 2024.
According to Yonhap News Agency, An Byung-chul, president and head of the strategy division at Hanwha Aerospace, cited the won's depreciation against the dollar and increasing demand for defense products as the primary factors bolstering this year's earnings. In a press conference, An emphasized the importance of fast product delivery and enhanced productivity in reducing manufacturing costs. He also projected an operating profit of 3 trillion won for the year, reflecting a significant 76 percent increase from the 1.7 trillion won profit reported last year.
An attributed the optimistic financial outlook to equity gains from Hanwha Ocean Co., a shipbuilding affiliate in which Hanwha Aerospace holds a 30.44 percent stake. These gains began contributing to the company's earnings from the fourth quarter of the previous year. The global defense spending is anticipated to rise to 4,315 trillion won by 2035, up from 3,595 trillion won last year, driven by the Russia-Ukraine conflict, ongoing tensions in the Middle East, and strategic rivalry between the United States and China, as noted by An.
Hanwha Aerospace aims to capitalize on this growth by establishing production bases in strategic markets and forming partnerships with local companies. An emphasized that localization in production is crucial for growth, necessitating substantial overseas investments. The company plans to invest 11 trillion won over four years through 2028, partly funded by a share sale plan expected to raise 3.6 trillion won, to position itself as a global leader in the defense and shipbuilding industries.
The company intends to raise 2.3 trillion won through a share sale to retail investors and an additional 1.3 trillion won by issuing shares to its three affiliates. Of the total investment, 6.27 trillion won, or 57 percent, will be allocated for overseas investments targeting future growth opportunities. Hanwha Aerospace plans to use some proceeds from the share sale to acquire strategic production bases in Europe, the Middle East, Australia, and the United States, anticipating increased opportunities from Europe's rearmament push and U.S. efforts to strengthen its shipbuilding capabilities.
An revealed plans to inject 800 billion won to acquire a stake in an overseas shipyard in North America, Europe, or the Middle East by 2026. At the end of 2024, Hanwha Aerospace had an order backlog of 31.4 trillion won, with key products including the K9 self-propelled howitzer and the Chunmoo multiple launch rocket system.
As of 2:10 p.m., Hanwha Aerospace shares surged by 8.88 percent to 699,000 won, significantly outperforming the broader Korea Stock Price Index's (KOSPI) 0.14 percent gain.