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Hanon Systems Announces First Quarter 2025 Financial Results

• - Revenue reached KRW 2.617 trillion, reflecting 8.9% year-over-year increase
• - Operating profit was KRW 20.9 billion, representing a 68.5% decline year-over-year; company continues profitability management efforts amid market uncertainty
• - Continued strategic efforts are underway to drive structural improvements, aimed at strengthening long-tem financial soundness

 

SEOUL, South Korea, May 8, 2025 – Hanon Systems, a leading global automotive thermal management supplier and a subsidiary of Hankook & Company Group, announced its financial results for the first quarter of 2025.

 

The company recorded consolidated revenue of KRW 2.617 trillion in the first quarter of 2025, an 8.9% increase year-over-year and a 3.2% increase quarter-over-quarter. This growth was primarily driven by favorable foreign exchange movements and higher production volumes.

 

Operating profit for the quarter was KRW 20.9 billion, reflecting a 68.5% decrease from the same period last year. This decline was attributed to the impact of tariffs, a narrower scope of R&D capitalization, increased depreciation expenses, and prolonged delays in customer compensation. The company posted a net loss of KRW 22.6 billion, impacted by higher interest costs and reduced profitability.

 

Although operating profit declined the year-over-year, the return to operating profit in first-quarter 2025 - following a significant deficit in fourth-quarter 2024 driven by one-time restructuring costs - signals initial progress in the company’s profitability improvement efforts. However, given the heightened market uncertainty stemming from tariff policies under the Trump administration, the company plans to proactively pursue ongoing cost improvement efforts.

 

Under the leadership of a new management team, Hanon Systems has initiated long-term strategies aimed at structural transformation and strengthening financial health. The company's policy to limit R&D capitalization has placed short-term pressure on profitability, but it is viewed as a proactive step toward enhancing financial fundamentals. The estimated cost impact of this policy in first-quarter was approximately KRW 21 billion, with similar effects expected in the upcoming quarters.

 

Sales from electrified vehicles (xEVs) represented 27% of total revenue in the first quarter, up from 25% in 2024. This figure is expected to increase to approximately 30% in 2025, supported by major OEMs' launch of new battery electric vehicles (BEVs).

 

Vice Chairman and CEO Soo-Il Lee stated, “Although our first-quarter operating profit fell short of market expectations due to the impact of tariffs, we expect to achieve progressive performance improvement through structural enhancement, including operational efficiency and ongoing restructuring. We will continue to focus on strengthening financial soundness and enhancing global competitiveness with a long-term perspective.”