South Korea’s leading defense companies reported record earnings in the first half of 2025, driven by a surge in arms exports to Europe and the Middle East.
According to regulatory filings and financial reports, the combined operating profits of five major defense firms — Hanwha Aerospace, LIG Nex1, Korea Aerospace Industries (KAI), Hyundai Rotem, and Hanwha Systems — reached 2.3 trillion won ($1.7 billion) for the January-June period. The figure represents a 161.2 percent increase from 880.7 billion won a year earlier.
The results already account for nearly 80 percent of the firms’ full-year operating profit in 2024, which stood at 2.88 trillion won. Their combined sales nearly doubled year-on-year to 19.2 trillion won from 9.9 trillion won.
Industry leader Hanwha Aerospace reported a record 1.43 trillion won in operating profit, quadrupling from 355 billion won during the same period last year. Its sales rose sharply to 11.8 trillion won, more than three times the prior figure.
LIG Nex1 posted a 64.6 percent rise in operating profit to 191.2 billion won, while sales increased 35.4 percent to 1.9 trillion won.
Korea Aerospace Industries recorded an operating profit of 132 billion won, up 7.9 percent, though its sales fell 6.4 percent to 1.5 trillion won.
Hyundai Rotem delivered 460.4 billion won in operating profit, a 192.4 percent year-on-year increase, alongside 2.6 trillion won in sales, up 40 percent. Hanwha Systems, however, reported a 29.5 percent decline in operating profit to 91.6 billion won, though sales climbed 18.4 percent to 1.5 trillion won.
Industry officials attributed the strong first-half performance to robust overseas demand amid heightened geopolitical risks in Europe and the Middle East.
Hanwha Aerospace reported that second-quarter overseas sales jumped 43 percent compared with last year, with exports of its Chunmoo multiple rocket launcher driving growth. Hanwha Systems also saw second-quarter sales rise 11.8 percent, supported by deliveries of multifunction radars used in the Cheongung-II medium-range surface-to-air missile system, supplied to the United Arab Emirates and Saudi Arabia.
KAI posted overseas sales of 227.3 billion won in the second quarter, reflecting strong demand for its FA-50 fighter jets exported to Poland and Malaysia.
Market analysts note that the combined order backlog for the five companies has reached 111.9 trillion won ($81 billion), providing a strong pipeline for future growth.
The strong performance of South Korea’s defense industry underscores its growing role as a global arms supplier at a time when allies in Europe and the Middle East are increasing procurement. With record backlogs and major contracts already secured, industry observers expect growth to continue into 2026 and beyond.