Nice Investors Service Upgrades Hanwha Aerospace Credit Rating to 'AA'

"Improved Financial Stability Alongside Business Performance"
AA Rating Also Assigned to Hanwha Systems

Nice Investors Service announced on November 20 that it has upgraded the long-term credit rating of Hanwha Aerospace from AA- to AA. The rating outlook has been revised from Positive to Stable.

Nice Investors Service assessed that Hanwha Aerospace is showing a trend of expanding business performance, driven by the growth of its defense sector and improvements in the aviation and shipbuilding industries. The agency stated, "Since 2022, Hanwha Aerospace has maintained a significantly increased order backlog in the defense sector based on large-scale export contracts for its products," and added, "As the production and delivery of these orders expand, the company is demonstrating an improving business performance trend."

Furthermore, the agency noted, "In 2025, the production and delivery of export products are set to increase, resulting in expanded sales and outstanding operating profitability in the ground defense sector," and stated, "Considering the remaining order backlog and the medium- to short-term delivery schedule, excellent business performance in the ground defense sector is expected to continue."

The agency also explained that financial stability has improved due to the inflow of capital from paid-in capital increases. In April of this year, Hanwha Aerospace received 1.3 trillion won from a third-party allotment paid-in capital increase through its affiliates. An additional approximately 2.9 trillion won was injected through a rights offering in July.

Nice Investors Service emphasized, "Following the paid-in capital increases, as of the end of September this year, the consolidated debt ratio stood at 221.8% and the net debt dependency at 13.0%, indicating enhanced liquidity management capabilities and reduced financial burden compared to the past. Although large-scale investments are expected to continue over several years, the company is likely to respond smoothly based on its increased cash generation and the substantial funds raised through capital increases."

In addition, the agency assigned Hanwha Systems a long-term credit rating of AA with a Stable outlook. Nice Investors Service explained, "Hanwha Systems demonstrates strong business stability, supported by its capital- and technology-intensive defense business and ICT operations based on group demand," and added, "With rising demand in the defense sector, the company is experiencing a growth trend in scale, and its operating profitability is expected to remain at an excellent level."

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