Hanwha Solutions Full After Sunrise... Operating Profit 966.2 Billion KRW, Record High

2022 Performance Announcement... Record High Sales
Chemicals Lead in H1, Renewable Energy in H2
Largest Solar Business Expansion Since 2011

[Asia Economy Reporter Choi Seoyoon] Hanwha Solutions achieved record-high sales and operating profit last year. This is the synergy effect of its two main businesses: renewable energy and chemical sectors. The chemical sector performed well in the first half, while the renewable energy sector excelled in the second half.

Hanwha Solutions announced on the 16th that it recorded consolidated sales of KRW 13.6539 trillion and operating profit of KRW 966.2 billion last year.

Sales increased by 27.3% compared to the previous year, and operating profit rose by 30.9%. Net profit for the period was KRW 378 billion, down 38.7% from the previous year due to equity method losses (KRW 101.9 billion) from subsidiaries such as Yeocheon NCC.

Strong Performance Despite Expanding Uncertainty in Business Environment Due to Stable Business Structure

By business segment, the renewable energy sector recorded sales of KRW 5.5685 trillion, up 56.0% year-on-year, and turned to an operating profit of KRW 350.1 billion. Both sales and operating profit were the largest ever since entering the solar power business in 2011.

The renewable energy sector posted an operating loss of KRW 328.5 billion in 2021 due to rising raw material costs and logistics expenses. However, after successfully turning to profit in the second quarter of last year, it achieved record quarterly profits consecutively in the third and fourth quarters. This was due to increased sales of solar modules in the U.S., the company's main market, amid the global energy crisis and accelerated carbon neutrality, as well as significant increases in sales and profits from the sale of overseas power assets such as solar and wind power.

Hanwha Solutions held the number one position in the U.S. residential and commercial solar module markets for 17 and 12 consecutive quarters respectively through the third quarter of last year. It is expected to maintain the top spot in the fourth quarter as well.

The chemical sector recorded sales of KRW 5.9092 trillion and operating profit of KRW 588.9 billion. Sales increased by 10.2% compared to a year earlier, while operating profit decreased by 43.7%. As oil prices gradually stabilized, the burden of raw material purchase costs decreased, but profitability worsened due to margin contraction in core products such as PVC (polyvinyl chloride) and PE (polyethylene).

The advanced materials sector posted sales of KRW 1.1522 trillion, up 22.7% year-on-year, and operating profit of KRW 35.3 billion, an increase of 263.9%. Demand for parts materials increased due to expanded production volumes in the automotive industry, and sales of materials for solar modules (EVA sheets) also rose. The Galleria sector recorded sales of KRW 532.7 billion, up 3.5% from the previous year, and operating profit of KRW 37.3 billion, up 29.1%, supported by a recovery in consumer sentiment.

In the fourth quarter of last year, Hanwha Solutions recorded sales of KRW 3.9288 trillion, up 32.6% year-on-year, and operating profit of KRW 182.2 billion, up 116.3%. The renewable energy sector's fourth-quarter sales (KRW 2.082 trillion) surpassed KRW 2 trillion for the first time, and operating profit (KRW 231.9 billion) reached a record high. The chemical sector posted a quarterly loss (KRW 32.1 billion) for the first time in four years since the fourth quarter of 2018.

Full-Scale Establishment of North American Solar Hub... Targeting Operating Profit of KRW 1 Trillion Era

Hanwha Solutions expects continued uncertainty in the external business environment this year due to geopolitical crises and economic recessions in major countries, but plans to focus on strengthening mid- to long-term growth engines through continuous investment. By the second half of this year, it plans to complete the expansion of its solar module factory in Dalton, Georgia, USA, and continue strategic investments such as expanding caustic soda (CA) production facilities at its Yeosu plant in Korea.

Chief Financial Officer (CFO) Shin Yongin said, “Although the business environment remains highly uncertain this year due to sluggish petrochemical conditions, we expect the U.S. solar market to expand following the implementation of the IRA (Inflation Reduction Act). We will continue our growth momentum with the goal of achieving operating profit exceeding KRW 1 trillion for the first time this year.”

Internal Director (Reappointment) Candidate: Lee Gu-young, Head of Q-Cells Division; Non-Executive Director (Non-Standing Registered Director) Candidate: Kim In-hwan, CEO of Hanwha Advanced Materials; Outside Director Candidate: Jang Jae-soo, CEO of Korea University Technology Holdings Company
[Photo by Hanwha Solutions]

On the same day, Hanwha Solutions held a board meeting and recommended Lee Guyoung, head of the Q CELLS division, as an inside director (for reappointment), Kim Inhwan, CEO of Hanwha Advanced Materials, as a non-executive director (non-standing registered director), and Jang Jaesoo, CEO of Korea University Technology Holdings, as an outside director candidate. This year's regular shareholders' meeting will be held on the 23rd of next month.

This content was produced with the assistance of AI translation services.