Hanwha Systems' second-quarter operating profit topped 100 billion won, setting an all-time high. Thanks to large export programs such as the Poland K2 tank, operating profit in the defense institutional sector grew by nearly 100% from a year earlier.
Hanwha Systems said on the 28th that on a consolidation basis, second-quarter operating profit came to 103.7 billion won. That was up 219% from 32.5 billion won a year earlier, the highest on a quarterly basis. As a result, Hanwha Systems' operating profit in the first half reached 138 billion won, up 109% from 66.1 billion won in the same period a year earlier.
Second-quarter revenue rose 45% to 1.1176 trillion won from a year earlier. Cumulative first-half revenue increased 32% to 1.9247 trillion won. Net income in the second quarter was 52.7 billion won, up 14% from a year earlier. However, on a cumulative first-half basis, it was still a 43 billion won loss, swinging to a deficit from a year earlier.
The defense institutional sector drove the second-quarter results. Revenue was 700.6 billion won and operating profit was 103.7 billion won, up 49% and 98%, respectively, from a year earlier. Results related to large export programs were reflected this quarter, including Poland's K2 tank sights and fire control systems ▲ the United Arab Emirates (UAE) and Saudi Arabia Cheongung-II multifunction radar (MFR).
In addition, major domestic programs contributed to earnings, including ▲ the next-generation Ulsan-class Batch III frigate combat management system (CMS) ▲ the Korea Fighter Experimental (KF-21) active electronically scanned array (AESA) radar and avionics ▲ the fourth mass production of domestic K2 tank sights and fire control systems.
The information and communications technology (ICT) institutional sector posted revenue of 187.3 billion won, up 27% from a year earlier. Operating profit rose 93% to 20.8 billion won. It generated revenue from affiliate system build-outs such as ▲ Hanwha Life Insurance's next-generation system ▲ Hanwha Philly Shipyard Inc. ERP ▲ Hanwha Aerospace smart plant deployment.
The other businesses institutional sector, including the Philly Shipyard, posted a second-quarter operating loss of 20.8 billion won, still dragging down total operating profit, but the loss narrowed from a 30.8 billion won loss in the second quarter of last year and a 48.1 billion won loss in the first quarter of this year. Revenue in this area increased 52% to 229.7 billion won.
Hanwha Systems' order backlog totaled 11.2959 trillion won as of the second quarter this year.
Hanwha Systems plans to maintain steady growth by expanding its export portfolio this year while continuing to win major domestic contracts. A Hanwha Systems official said, "Stable sales from large export programs and major domestic mass-production programs drove the improvement in results," and added, "We will firmly establish a foundation for sustainable growth by opening overseas markets and strengthening core technological capabilities."