Hanwha Co.'s operating profit in the first quarter of this year rose by nearly 25% from a year earlier. The improvement is attributed to better profitability in the construction institutional sector as the cost ratio improved on the back of strong results at subsidiaries such as defense.
Hanwha Co. said in a filing on the 6th that its first-quarter operating profit on a consolidation basis came to 189.49 billion won. That was up 24.8% from a year earlier. Revenue for the same period fell 4.0% to 1.058 trillion won.
By institutional sector, the common institutional sector, which combines affiliate dividends revenue and brand license revenue, recorded 165.1 billion won, accounting for 87.1% of total operating profit. That was up 28.8% from a year earlier, driven by improved results at subsidiaries such as defense and shipbuilding. Hanwha Aerospace and Hanwha Ocean saw their first-quarter operating profit increase by 20.6% and 70.6%, respectively, from a year earlier.
In Hanwha Co.'s own construction institutional sector, first-quarter revenue fell 20.2% from a year earlier to 521.8 billion won, but operating profit rose 32.3% to 17.2 billion won. Although revenue decreased as large projects were completed, operating profit increased as the cost ratio improved, Hanwha said. The current order backlog in the construction institutional sector stands at 13.7 trillion won, and the company plans to win a total of 3.1 trillion won in orders this year.
Another own business, the global institutional sector, posted revenue of 352.7 billion won, up 15.3% from a year earlier, but operating profit fell 31.8% to 7.3 billion won. As geopolitical risks in the Middle East expanded, petrochemical prices rose, boosting revenue. However, as the Yeosu nitric acid plant entered full operation, fixed costs began to be reflected, and operating profit decreased.