Hanwha posts explosive order backlog with record $22 billion by end of Q2

Hanwha Aerospace logged a record $22 billion in orders through the end of the second quarter as demand for foreign governments grew, with the export of howitzers and rocket systems to Poland leading the charge.

Hanwha Aerospace's K-9 self-propelled howitzer displayed at the World Defense Show 2024 that was held in Riyadh, Saudi Arabia, from Feb. 4 to 8. [YONHAP]

Hanwha Aerospace’s order backlog surged 8.6 percent on year, reaching a record high of 30.3 trillion won ($22 billion) by the end of the second quarter driven by a rise in demand from foreign governments for the arms manufacturer's key products.

The defense company also posted an earnings surprise, with second quarter operating profit skyrocketing 356.5 percent to 358.8 billion won. The figure exceeded the market forecast by compiled by market tracker FnGuide by 66 percent.

Quarterly revenue jumped 46 percent to 2.8 trillion won, above market expectations of 2.6 trillion won.

Net profit sunk 46.6 percent to 159.9 billion won, also surpassing the market consensus of 150.9 billion won.

The company said in a press statement that revenue from overseas surged fivefold compared to the year before.

Hanwha Aerospace’s land systems sector logged sales of 1.33 trillion won, up 122 percent on year. Operating profit increased 1,089 percent to 260.8 billion won.

The high performance derives from the export of six K-9 self-propelled howitzers and 18 Chunmoo multiple launch rocket systems to Poland, with delivery commencing in the second quarter. A 1.3 trillion won deal with Romania to supply K-9s that was secured earlier this month is expected to be reflected in the next quarter’s order book.

The aerospace division reported sales of 562.4 billion won, up 40 percent on year, and operating profit of 7.5 billion won, up 36 percent on year. The surge reflects an increase in demand for aircraft components and maintenance with the industry's revival after the Covid-19 pandemic.

Hanwha Vision, its surveillance camera maker, saw an increase in sales of 11 percent to 315.9 billion won due to rising demand in the North American and European markets. Operating profit slumped 15 percent to 38.9 billion won from a decline in profitable product sales and development costs.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]