Operating profit in the third quarter this year at major domestic defense corporations has surpassed last year's annual operating profit. With the order backlogs in the defense institutional sector of the four defense companies approaching 100 trillion won, and key countries in Europe and the Middle East increasing defense expenditure, expectations for future orders are set to continue.
According to the defense industry on the 16th, Hanwha Aerospace, LIG Nex1, Korea Aerospace Industries (KAI), and Hyundai Rotem—Korea's four leading defense corporations—posted a cumulative operating profit of 3.4928 trillion won in the third quarter this year. That is about 800 billion won more than last year's combined annual operating profit of 2.6589 trillion won.
Hanwha Aerospace recorded cumulative third-quarter revenue of 18.2816 trillion won and operating profit of 2.2816 trillion won. With the performance of its subsidiary Hanwha Ocean reflected starting this year, the scale of the corporations has grown. Even excluding Hanwha Ocean's results, the existing business institutional sector continues to deliver solid performance.
In the third quarter, the ground defense institutional sector posted revenue of 2.1098 trillion won and operating profit of 572.6 billion won, up 27% and 30%, respectively, from a year earlier. The aerospace institutional sector swung to a profit with operating profit of 3.1 billion won.
LIG Nex1 recorded cumulative third-quarter revenue of 2.9022 trillion won and operating profit of 280.8 billion won. Powered by mass-production and development programs including the medium-range surface-to-air guided weapon "Cheongung II," LIG Nex1 has consistently posted double-digit operating profit growth rate this year.
Hyundai Rotem, buoyed by balanced overseas orders in rail and defense, posted cumulative third-quarter operating profit of 738.2 billion won. That far exceeds last year's full-year operating profit of 456.6 billion won. KAI, which produces the KF-21 Korean supersonic fighter and the FA-50 multirole fighter, recorded revenue of 2.2297 trillion won and operating profit of 192.2 billion won in the same period.
These corporations have built up defense order backlogs close to 100 trillion won. Hanwha Aerospace recorded a defense order backlog of 30.9959 trillion won as of the third quarter. Separately managed, the defense order backlog at its subsidiary Hanwha Systems is 8.185 trillion won.
KAI and LIG Nex1 followed Hanwha Aerospace with third-quarter order backlogs of 26.27 trillion won and 23.4271 trillion won, respectively. Hyundai Rotem, after signing a second export contract for K2 tanks ($6.5 billion) with the Armament Agency of Poland in Aug., achieved a defense order backlog of 10.7897 trillion won.