Defense profits slump as energy, solar businesses rise in Q3

South Korea’s major industrial companies reported sharply contrasting third-quarter earnings Thursday, with Hanwha Aerospace posting a steep profit decline due to delayed weapons deliveries, while Doosan Enerbility, Hanwha Solutions and Samsung Heavy Industries benefited from stronger performance in their respective businesses.

Hanwha Aerospace said its consolidated operating profit plunged 46.2 percent from a year earlier to 452 billion won ($339.8 million), falling well short of market expectations of around 1 trillion won. Revenue declined 6 percent to 6.09 trillion won, while the company swung to a net loss of 36.7 billion won.

The weaker results reflected the early delivery of some defense equipment in the second quarter and the concentration of major shipments, including K9 self-propelled howitzers for Poland, in the fourth quarter. Operating profit from its land defense business totaled just 21.7 billion won.

Despite the quarterly setback, Hanwha Aerospace’s operating profit for the first nine months rose 10.1 percent to 2.46 trillion won. The company expects earnings to recover in the fourth quarter as it delivers K9 howitzers and Chunmoo multiple rocket launchers to Poland and advances K9 programs in Egypt and Australia.

Doosan Enerbility, meanwhile, reported a 90.6 percent surge in third-quarter operating profit to 261.2 billion won, with revenue rising 14.7 percent to 4.45 trillion won.

The company secured major power plant construction contracts, including the Misfah combined-cycle gas power project in Oman, the Hadong combined-cycle power plant in South Korea and the O Mon 3 gas-fired power project in Vietnam. It also signed a contract with U.S. nuclear developer TerraPower to manufacture key components for small modular reactors.

Its order backlog reached 26.58 trillion won at the end of September, up approximately 1 trillion won from the previous quarter.

Hanwha Solutions returned to an operating profit of 90.5 billion won, supported by its U.S. solar business. Revenue increased 17.3 percent from a year earlier to 3.95 trillion won.

Samsung Heavy Industries also recorded a 42 percent increase in operating profit, extending the positive earnings momentum in South Korea’s shipbuilding sector.