Hanwha (KRX: 000880) delivered a disappointing second-quarter performance this year, weighed down by the construction industry downturn and raw material cost pressures. Despite growth in new businesses such as defense and energy, the deterioration in its core construction division dragged down overall profitability.<\/p>\n
Hanwha disclosed on Aug. 4 that standalone operating profit for the second quarter came in at \u20a9113.3 billion (approximately $79.2 million), down 12.6% from the same period last year. Revenue fell 11.4% to \u20a91 trillion (approximately $700.3 million), while net profit swung to a surplus of \u20a951 billion (approximately $35.7 million), compared with a \u20a932.1 billion (approximately $22.5 million) loss in the prior-year period.<\/p>\n
The construction division showed the most pronounced decline among business segments. It posted second-quarter revenue of \u20a9577.4 billion (approximately $403.8 million) and operating profit of \u20a958.4 billion (approximately $40.8 million), down 22% and 30% year-over-year, respectively. Hanwha attributed the revenue drop to the completion of large-scale building and development projects, while operating profit fell due to base effects from last year’s settlement of large project contracts. However, improved cost ratios partially cushioned the profitability decline. The construction division has set a target of achieving \u20a92.7 trillion (approximately $1.9 billion) in new orders this year.<\/p>\n
The global division saw revenue rise 7% year-over-year to \u20a9353.5 billion (approximately $247.2 million), but operating profit fell 29% to \u20a94.9 billion (approximately $3.4 million). While revenue improved on higher petrochemical product prices driven by heightened geopolitical uncertainty from the Middle East conflict, rising ammonia prices increased manufacturing costs for key products such as nitric acid, ammonium nitrate, and explosives, hitting operating profit. Hanwha expects the global division to see steady growth in explosives sales this year on the back of recovering construction demand. The company also anticipates expansion of its trading business as petrochemical product prices rise.<\/p>\n
Hanwha also set a minimum dividend of \u20a91,000 (approximately $0.70) per share on the same day, with plans to actively consider additional dividends if future dividend resources increase. The company outlined a strategy to generate cash flow through sustainable growth in defense\u00b7aerospace, shipbuilding, renewable energy, petrochemicals, and finance, as well as revenue growth and return on equity (ROE) improvement in its own businesses such as construction and global operations.<\/p>\n
Hanwha’s second-quarter segment results are summarized below.<\/p>\n
SegmentRevenueOperating ProfitConstruction\u20a9577.4 billion (down 22% YoY)\u20a958.4 billion (down 30% YoY)Global\u20a9353.5 billion (up 7% YoY)\u20a94.9 billion (down 29% YoY)<\/p>\n
Note: Segment figures are on a standalone basis.<\/p>\n
The earnings release comes amid a prolonged slowdown in the construction sector, drawing market attention. As Hanwha serves as the holding company for the broader Hanwha Group, its earnings deterioration is closely tied to the group’s overall financial health and dividend capacity. However, the swing to a net profit and the establishment of a minimum dividend signal shareholder-return commitment, which analysts read as positive.<\/p>\n
Experts say that while the construction division’s earnings slowdown may persist in the near term, rising petrochemical prices in the global division and growth in new businesses such as defense and energy are expected to drive future performance. Whether Hanwha’s proposed dividend policy and ROE improvement targets translate into actual cash flow generation will be a key variable determining the stock’s future direction.<\/p>\n","protected":false},"excerpt":{"rendered":"Hanwha (KRX: 000880) delivered a disappointing second-quarter performance this year, weighed down by the construction industry downturn and…\n","protected":false},"author":2,"featured_media":108850,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[30],"tags":[2825,56008,56011,32570,2333,56009,355,354,2265,56010,3491,3490,55999,551],"class_list":["post-108849","post","type-post","status-publish","format-standard","has-post-thumbnail","category-hanwha","tag-ammonia","tag-construction-division","tag-defenseaerospace","tag-dividend-per-share","tag-finance","tag-global-division","tag-hanwha","tag-hanwha-group","tag-middle-east-conflict","tag-nitric-acidammonium-nitrateexplosives","tag-petrochemicals","tag-renewable-energy","tag-roe","tag-shipbuilding"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/108849","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/comments?post=108849"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/posts\/108849\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media\/108850"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/media?parent=108849"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/categories?post=108849"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/korea\/wp-json\/wp\/v2\/tags?post=108849"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}