Hanwha Systems Co., the defense solutions arm of Hanwha Group, announced a net loss in the first quarter, attributing it to significant equity losses related to its investment in a US shipyard. The company recorded a net loss of 95.75 billion won ($65 million) for the three months ending March, a sharp contrast to the 24.36 billion won net profit reported a year earlier. The increased equity losses from Hanwha Philly Shipyard in Philadelphia were worsened by severe snowfall in the northeastern United States during January and February.
Hanwha Systems, holding a 60 percent stake in the US shipyard, saw the remaining 40 percent owned by affiliate Hanwha Ocean Co. The acquisition of the shipyard in 2024 for 140 billion won was part of Hanwha Group’s strategy to expand into the US shipbuilding market, aiming to secure contracts from the US Navy in the long term. This acquisition marked the first by a South Korean shipbuilder in the US and is a significant asset in the “Make American Shipbuilding Great Again” (MASGA) initiative supported by Seoul.
Despite the net loss, the company reported a 1.9 percent increase in operating profit to 34.28 billion won in the first quarter, up from 33.63 billion won a year earlier. Sales also surged by 16.9 percent to 807.09 billion won from 690.1 billion won, driven by exports of multifunction radars for the Cheongung-II missile system to the United Arab Emirates and Saudi Arabia. Hanwha Systems anticipates a substantial reduction in losses at the Philadelphia shipyard for the rest of the year, backed by planned vessel deliveries.
In a separate development, HS Hyosung Advanced disclosed a first-quarter net profit of 6.7 billion won ($4.6 million), marking a 33.1 percent decline from the previous year. The company reported 34.4 billion won in operating profit for the quarter, down from 49.1 billion won a year ago, with revenue also decreasing by 2.9 percent to 829 billion won.
