Hanwha Corporation, the holding company of South Korea’s Hanwha Group, is estimated to post a record operating profit of 1.8 trillion won ($1.51 billion) this year and is expected to remain profitable next year, driven by robust sales in its defense, gunpowder and machinery sectors and improved performance of key subsidiaries.

Hanwha’s Q3 operating profit zoomed 546.6 percent year-on-year to 659.5 billion won over sales of 12.2 trillion won on a consolidated basis. Sales grew 8.0 percent. The surge is attributable to a strong performance in its own businesses and increased earnings of its major subsidiaries including Hanwha Engineering & Construction, Hanwha Chemical and Hanwha Life Insurance.

Hanwha E&C is on track to see tangible results this year after losses for two straight years as its Marafiq project has started commercial production and Yanbu project is about to complete commissioning of its final facility. The construction arm recorded 110 billion won in Q3 operating profit versus an operating loss of 440 billion won last year.

Profitability is improving in business in Hanwha’s own pipeline: gunpowder, machinery and trade. The trade sector swung to an operating profit of 2.6 billion won in the third quarter thanks to a rebound in oil prices. Defense and gunpowder sectors, which are in their peak season, are estimated to post 60 billion won in operating profit in the fourth quarter.

In addition, Hanwha has a bright outlook for next year with increased brand royalty income. Early this month, the company renewed brand royalty deals worth 94.7 billion won in total with six subsidiaries, including Hanwha Life Insurance, Hanwha Chemical and Hanwha Investment & Securities. Given there are some undisclosed deals with other affiliates, the company’s brand royalty income will total 140 billion won in 2017, up 45.4 percent from this year.

Hanwha said it will continue efforts to strengthen business performance of its major subsidiaries and ensure synergy from acquired companies to achieve a stable growth.

Hanwha Corporation’s stock closed at 35,550 won on Wednesday, up 0.57 percent, or 200 won, from the previous session.

By Park Yun-gu

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]