Hanwha Aerospace Reports Record Quarterly Profit as Defense Orders Surge
The South Korean defense giant posted operating profit above ₩1 trillion for the first time in a single quarter, driven by strong export deliveries and naval shipbuilding.
Record-Breaking Quarter
Hanwha Aerospace Co., Ltd. reported consolidated revenue of ₩9.29 trillion for the second quarter of 2026, up 47% year-on-year, while operating profit reached ₩1.37 trillion, a 59% increase (earnings call, 2026-07-31). The company noted that consolidated operating profit "surpassed the ₩1 trillion mark for the first time in a single quarter," driven by growth across its Ground Defense, Hanwha Ocean, and Hanwha Systems divisions.
Net profit for the quarter stood at ₩1.08 trillion, while the company maintained a net debt ratio of 31% with total assets of ₩58.74 trillion.
Ground Defense Deliveries Accelerate
The Ground Defense division generated ₩2.11 trillion in revenue, up 19% year-on-year, with operating profit of ₩533 billion, a 2% increase. Overseas revenue climbed 14% to ₩1.23 trillion, driven by "smooth progress of scheduled deliveries to various regions, including Poland, Egypt, and the Middle East" (earnings call, 2026-07-31).
The company confirmed that "full-scale deliveries" of K9 self-propelled howitzers to Poland under the second phase of mass production are "scheduled for the second half of the year." Management disclosed that Poland accounts for "more than half" of export volume and set annual delivery targets of "over 30 K9 units and over 40 Chunmoo units."
The Ground Defense order backlog stood at ₩38.3 trillion at quarter-end, reflecting contracts signed in April and May for additional K9 exports to Finland (₩940 billion) and Chunmoo systems to Estonia.
Aerospace Turns Profitable
The Aerospace division posted ₩760 billion in revenue, up 17% year-on-year, with operating profit of ₩37 billion, turning positive from a year-earlier loss. The improvement came from "increased military production volume and a larger share of business with relatively solid profit margins" (earnings call, 2026-07-31).
Operating losses from the GTF RSP program narrowed to ₩10.2 billion, a reduction of ₩37.3 billion year-on-year. GTF engine sales volume reached 261 units, up from 227 units in the prior-year period, while Boeing and Airbus delivered 408 aircraft in the quarter versus 320 a year earlier.
The company announced it had "unveiled the first prototypes of two types of long-life UAV engines developed using our own domestic technology" in collaboration with the Agency for Defense Development, marking "the first time we have successfully developed and completed prototypes for long-life aviation engines" domestically.
Subsidiaries Drive Growth
Hanwha Ocean reported revenue of ₩5.44 trillion, up 65% year-on-year and 70% quarter-on-quarter, with operating profit of ₩736.1 billion, achieving "its best quarterly performance since its acquisition" (earnings call, 2026-07-31). Hanwha Systems posted revenue of ₩1.12 trillion and operating profit of ₩103.7 billion, up 219% year-on-year.
Order Pipeline and Outlook
Regarding the Spanish self-propelled howitzer modernization project, management confirmed "discussions are proceeding smoothly" following statements by partner Indra. The company is awaiting the U.S. self-propelled howitzer modernization project award, anticipated "sometime in August," though slightly delayed from the original schedule.
In the Middle East, management acknowledged that "heightened geopolitical tensions" are delaying orders but expects discussions to "yield tangible results within the current quarter."
The company is scheduled to report third-quarter 2026 results on October 30, 2026, according to MarginX data.
This article was generated by MarginX from the earnings call on 2026-07-31. It is not investment advice.