Core Insights - South Korean defense companies are experiencing record profits in the first half of 2025, driven by increased arms exports to Europe and the Middle East [1][12] Financial Performance - The total operating profit of major South Korean defense firms, including Hanwha Aerospace, LIG Nex1, Korea Aerospace Industries, Hyundai Rotem, and Hanwha Systems, reached 2.3 trillion KRW (approximately 1.7 billion USD), a 161.2% increase from 880.7 billion KRW in the same period last year [3] - These profits account for nearly 80% of the companies' total operating profit for the entire year of 2024, which is projected at 2.88 trillion KRW [5] - Combined sales nearly doubled, increasing from 9.9 trillion KRW to 19.2 trillion KRW year-on-year [5] Individual Company Performance - Hanwha Aerospace achieved an operating profit of 1.43 trillion KRW, nearly quadrupling from 355 billion KRW year-on-year, with sales soaring to 11.8 trillion KRW, over three times last year's figure [7] - LIG Nex1's operating profit rose by 64.6% to 191.2 billion KRW, with sales increasing by 35.4% to 1.9 trillion KRW [9] - Korea Aerospace Industries saw a 7.9% increase in operating profit to 132 billion KRW, although sales fell by 6.4% to 1.5 trillion KRW [9] - Hyundai Rotem's operating profit surged by 192.4% to 460.4 billion KRW, with sales reaching 2.6 trillion KRW, a 40% increase [11] - Hanwha Systems experienced a 29.5% decline in operating profit to 91.6 billion KRW, despite an 18.4% increase in sales to 1.5 trillion KRW [11] Market Dynamics - The strong performance in the first half of 2025 is attributed to heightened overseas demand amid escalating geopolitical risks in Europe and the Middle East [12] - Hanwha Aerospace reported a 43% increase in overseas sales in Q2, driven by exports of the K239 "Cheonmu" multiple rocket launcher system [14] - Korea Aerospace Industries recorded overseas sales of 227.3 billion KRW in Q2, reflecting strong demand for the FA-50 light fighter from Poland and Malaysia [16] - The total backlog of orders for these five companies has reached 111.9 trillion KRW (approximately 81 billion USD), providing solid support for future growth [17] - The impressive performance of the defense industry highlights South Korea's growing status as a global arms supplier, with expectations for continued growth momentum into 2026 and beyond [19]