Seoul: South Korea's major defense firms reported record earnings in the first half of the year, driven by substantial arms export deals, industry data showed Sunday. The combined operating profits of five leading defense firms-Hanwha Aerospace Co., LIG Nex1 Co., Korea Aerospace Industries (KAI), Hyundai Rotem Co., and Hanwha Systems Co.-reached 2.3 trillion won for the January-June period, marking a 161.2 percent increase from 880.7 billion won a year ago.
According to Yonhap News Agency, this figure already accounts for 79.9 percent of their projected full-year operating profit of 2.88 trillion won in 2024. The firms' combined sales nearly doubled, rising to 19.2 trillion won from 9.9 trillion won a year earlier. Hanwha Aerospace led the industry with a record 1.43 trillion-won operating profit in the first half, a fourfold increase from 355 billion won, while its sales more than tripled to 11.8 trillion won.
LIG Nex1's operating profit soared by 64.6 percent year-on-year to 191.2 billion won for the six-month period, with sales increasing by 35.4 percent to 1.9 trillion won. KAI recorded an operating profit of 132 billion won, up 7.9 percent, although its sales fell by 6.4 percent to 1.5 trillion won. Hyundai Rotem experienced a significant 192.4 percent surge in operating profit to 460.4 billion won, alongside a 40 percent increase in sales to 2.6 trillion won. In contrast, Hanwha Systems reported a 29.5 percent decline in operating profit to 91.6 billion won, though its sales rose by 18.4 percent to 1.5 trillion won.
Industry officials attributed these robust first-half results to strong overseas demand amid heightened geopolitical risks in the Middle East and Europe. Hanwha Aerospace saw its second-quarter overseas sales jump by 43 percent from a year earlier, supported by increased exports of defense systems, including the Chunmoo multiple rocket launcher. Hanwha Systems' second-quarter sales rose by 11.8 percent, driven by deliveries of multi-function radars (MFR) used in the Cheongung-II medium-range surface-to-air missile system to the United Arab Emirates and Saudi Arabia. KAI recorded 227.3 billion won in overseas sales for the second quarter, buoyed by exports of FA-50 fighter jets to Poland and Malaysia.
With a combined order backlog of 111.9 trillion won, market watchers anticipate continued growth momentum for the defense firms in the second half. "With continuous overseas orders for flagship products and deliveries, we have a positive outlook for the second half of the year and beyond," an industry official stated on condition of anonymity.