Hanwha Solutions Q1 Operating Profit 271.4 Billion KRW... 85% Increase YoY

by Choi Seoyoon

Published 27 Apr.2023 13:04(KST)

Hanwha Solutions has recorded its highest operating profit for the third consecutive quarter in the renewable energy sector, including its solar power business. This is due to the continuous increase in global solar power demand amid growing interest in energy security.

Hanwha Solutions announced on the 27th that it achieved consolidated sales of KRW 3.1002 trillion and an operating profit of KRW 271.4 billion in the first quarter of this year. Compared to the same period last year, sales increased by 8.9% and operating profit rose by 85.1%. Net profit for the period also grew by 29.4% year-on-year to KRW 133.4 billion.

By business segment, the renewable energy division recorded sales of KRW 1.3661 trillion, up 48.4% from the same period last year, and turned to an operating profit of KRW 245 billion. This operating profit is the largest since entering the solar power business in 2011, setting a new record for the third consecutive quarter.

Hanwha Solutions Q1 Operating Profit 271.4 Billion KRW... 85% Increase YoY

In the key market of the United States, sales of solar modules remained stable, and profitability improved through the sale of U.S. energy storage system (ESS) projects this year as well as last year. In particular, the ESS projects were highly valued for their business development potential, recording an operating profit of KRW 65 billion.

The chemical division recorded sales of KRW 1.3475 trillion, down 13.0% from the same period last year, and operating profit fell 86.9% to KRW 33.7 billion. Although it succeeded in returning to profitability in the first quarter after one-time factors such as performance bonuses disappeared, profitability recovery was slow due to continued weakness in the prices of key products.

Hanwha Solutions decided to include the expected amount of related tax credits from the U.S. Inflation Reduction Act (IRA), which came into effect on January 1, 2023, in its operating results starting from the first quarter of this year. Approximately KRW 22.9 billion of the expected tax credit amount was reflected in the first quarter operating profit of KRW 271.4 billion.

Shin Yong-in, Vice President and Chief Financial Officer (CFO), stated, “As global demand for renewable energy expands, a favorable environment has been created for the renewable energy sector, and module sales performance is expected to remain solid in the second quarter as well. The chemical division is expected to see gradual performance improvement in the second half of the year with global economic recovery and domestic demand rebound.”