HancomWith Solidifies Holding Company Role... Q3 Operating Profit Hits KRW 9.4 Billion

HancomWith, the holding company of the Hancom Group, has begun reflecting the group’s results in its consolidated financial statements after making Hancom a consolidated subsidiary. With results from key affiliates, including Hancom Lifecare, added to the figures, third-quarter consolidated operating profit rose nearly sixfold year over year.

HancomWith said on November 13 that it posted consolidated revenue of KRW 128.8 billion and operating profit of KRW 9.4 billion in the third quarter. Its operating margin was 7.3%. Operating profit increased sharply from KRW 1.6 billion in the same period last year. Cumulative revenue for the first three quarters was KRW 394.6 billion, and operating profit totaled KRW 8.8 billion. Cumulative operating profit rose 112% from KRW 4.1 billion in the same period last year.

Revenue declined 14.4% year over year, due to a decrease in the volume of physical gold distributed by subsidiary Hancom Gold Exchange amid an adjustment in international gold prices. However, the rate of decline narrowed compared with the first half of the year. The company said its net loss included an accounting valuation loss incurred when it revalued its existing stake during the process of bringing Hancom into the group, and that this was a one-off factor that did not involve a cash outflow.

The results newly included Hancom and its subsidiaries. HancomWith steadily purchased shares in Hancom this year, raising its direct stake to 31.2%, while the stake held by its largest-shareholder group, including specially related parties, stands at 40.15%. On this basis, Hancom was made a consolidated subsidiary beginning in the third quarter.

Hancom Lifecare posted particularly strong growth. Its third-quarter revenue was KRW 30.9 billion, up 31% year over year. Operating profit was KRW 3.4 billion, with an operating margin of 11.0%. Cumulative revenue for the first three quarters rose 60.5% to KRW 91.9 billion, while cumulative operating profit reached KRW 7.2 billion, three times the KRW 2.4 billion recorded in the same period last year.

Defense-related business drove the growth in results. The company has completed most deliveries of the ninth production batch of K5 next-generation gas masks supplied to the South Korean armed forces, and revenue also included deliveries of ground laser target designators (GLTDs). In the fire and safety division, new products such as lightweight modular self-contained breathing apparatuses and PG-1 fire helmets are gaining a foothold in the market.

In August, the company signed an exclusive five-year distribution agreement with France's Shark Robotics and began targeting the unmanned firefighting robot market. Revenue from new defense projects, including the urban combat training project and the Army's Korea Combat Training Center (KCTC), is also expected to be reflected in the results in phases starting next year.

HancomWith is also seeking growth opportunities in its own security business. Investment in security by public-sector and financial institutions is expected to expand as attacks exploiting artificial intelligence (AI) become more sophisticated and the government moves to transition to the National Network Security Framework (N2SF).

The company is expanding supplies to financial institutions and public agencies by promoting its AI authentication technology, which detects deepfake faces and synthesized voices. Its continuous authentication solution, which monitors user activity even after login, addresses demand for a transition to zero trust. The company is also applying post-quantum cryptography (PQC) technology to data and communications encryption products to target high-trust industries, including the public sector, finance and defense.

“The third quarter was when the group’s results began to be reflected in HancomWith’s earnings following the addition of Hancom,” said Song Sangyeop, CEO of HancomWith. “With a stronger earnings base across the group, we will also deliver results in our own businesses, such as AI authentication and post-quantum cryptography, to further strengthen our earnings structure.”

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