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Key Points

South Korea's top defence firms reported massive profit growth in the first half of 2024, led by Hanwha Aerospace's record earnings. Exports of Chunmoo rocket launchers and FA-50 jets drove sales as geopolitical tensions boosted demand. Hyundai Rotem and LIG Nex1 also saw significant profit jumps from overseas contracts. Analysts expect strong second-half performance with a 111.9 trillion won order backlog.

Key Points: South Korean Defence Firms See Record H1 Earnings From Export Deals

  • Hanwha Aerospace quadruples H1 profit to 1.43 trillion won
  • LIG Nex1 earnings jump 64.6% on arms exports
  • Hyundai Rotem posts 192% profit surge
  • KAI sees 227.3 billion won in FA-50 fighter jet sales
2 min read

Defence firms report strong H1 earnings on large export deals in S. Korea

Hanwha Aerospace, LIG Nex1, and other top firms report 161% profit surge amid strong global demand for arms exports.

"With continuous overseas orders for flagship products and deliveries, we have a positive outlook for the second half — Industry Official"

Seoul, Aug 17

South Korea's major defence firms reported record earnings in the first half of the year on the back of massive arms export deals, industry data showed on Sunday.

The combined operating profits of five leading defence firms -- Hanwha Aerospace Co., LIG Nex1 Co., Korea Aerospace Industries (KAI), Hyundai Rotem Co. and Hanwha Systems Co. -- reached 2.3 trillion won for the January-June period, up 161.2 percent from 880.7 billion won a year ago, according to the data from regulatory filings and financial reports.

The figure already represents 79.9 percent of their full-year operating profit of 2.88 trillion won in 2024, reports Yonhap news agency.

Their combined sales nearly doubled to 19.2 trillion won from 9.9 trillion won a year earlier.

Industry leader Hanwha Aerospace posted a record 1.43 trillion-won operating profit for the first half, quadrupling from 355 billion won, while its sales more than tripled to 11.8 trillion won.

LIG Nex1's operating profit soared 64.6 percent on-year to 191.2 billion won for the six-month period, with its sales jumping 35.4 percent to 1.9 trillion won.

KAI posted 132 billion won in operating profit, up 7.9 percent, but its sales fell 6.4 percent to 1.5 trillion won.

Hyundai Rotem saw its operating profit surge 192.4 percent on-year to 460.4 billion won, with 2.6 trillion won in sales, up 40 percent.

Hanwha Systems, meanwhile, reported a 29.5 percent drop in operating profit to 91.6 billion won, but sales rose 18.4 percent to 1.5 trillion won.

Industry officials attributed the robust first-half results to strong overseas demand amid heightened geopolitical risks in the Middle East and Europe.

Hanwha Aerospace saw its second-quarter overseas sales jump 43 percent from a year earlier, buoyed by increased exports of defense systems, such as the Chunmoo multiple rocket launcher.

Hanwha Systems' second-quarter sales rose 11.8 percent, boosted by deliveries of multi-function radars (MFR) used in the Cheongung-II medium-range surface-to-air missile system to the United Arab Emirates and Saudi Arabia.

KAI posted 227.3 billion won in overseas sales for the second quarter due to exports of FA-50 fighter jets to Poland and Malaysia.

With a combined order backlog of 111.9 trillion won, market watchers expect the defence firms' growth momentum to continue in the second half.

"With continuous overseas orders for flagship products and deliveries, we have a positive outlook for the second half of the year and beyond," an industry official said on condition of anonymity.

—IANS

- IANS

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Reader Comments

P
Priya S
Interesting to see South Korea's success in defense exports. While their numbers are impressive, I wonder how much of this comes at the cost of human welfare. Defense spending always makes me uncomfortable when so many basic needs remain unmet globally.
A
Aditya G
South Korea's defense industry is really booming! India should take notes - we need to reduce our dependence on imports and build our own defense ecosystem. Make in India should focus more on this sector with proper R&D investments.
S
Shreya B
The numbers are staggering! 161% profit growth is unbelievable. But it's sad that global conflicts are driving this business. Hope our Indian defense companies like HAL and DRDO can also capture more export markets with competitive products.
V
Vikram M
While impressive, this news makes me worry about arms race in Asia. India needs to balance defense preparedness with diplomacy. Our neighborhood is already volatile enough without more weapons floating around.
K
Karthik V
The FA-50 exports to Poland caught my eye. India should explore similar light combat aircraft deals. The Tejas has potential but needs better marketing and after-sales support to compete globally.

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