Hanwha's holding company turns red amid sluggish construction market

Hanwha Group headquarters in downtown Seoul / Courtesy of Hanwha Group

Hanwha Corp., the holding company of conglomerate Hanwha Group, reported an operating loss for the second quarter of this year, affected by a slowdown in the construction market.

In its standalone second-quarter earnings released Friday, Hanwha Corp.’s sales stood at 1.8 trillion won ($1.32 billion), down 13.8 percent year-on-year. It also reported an operating loss of 21.7 billion won during the same period, worsening from a 41 billion won profit a year earlier.

The setback is due mainly to losses in its construction business. The company said it added orders worth 894 billion won in the second quarter, but its order backlog shrank to 13.9 trillion won from 14.7 trillion won during the past year.

With a shrinking order backlog, the revenue from its construction division declined by 27.9 percent year-on-year, down to 967.7 billion won. Coupled with rising costs, the division swung to an operating loss of 58.8 billion won, a significant drop from the 31 billion won operating profit in the second quarter of last year.

The momentum division, which focuses on producing equipment for secondary batteries and solar power, showed signs of recovery, but still remained in a loss. The division’s operating loss for the second quarter amounted to 6.6 billion won, improving from 9.3 billion won a year earlier. Its sales increased by 47 percent year-on-year, reaching 201.8 billion won.

On the other hand, the global trading division showed improvements. The division posted 340.2 billion won in sales, up 13.9 percent from a year earlier, and its operating profit increased by 30.6 percent to 22.2 billion won.

Hanwha Corp. is the controlling company of Hanwha Group, standing as the largest shareholder of Hanwha Life, Hanwha Aerospace and other key affiliates. The company said its consolidated earnings will be released on Aug. 14.