HD Hyundai reported second-quarter operating profit exceeding 4 trillion won, supported by strong performance across its shipbuilding, construction equipment, refining and power equipment businesses.

The company said on July 31 that it posted consolidated revenue of 22.4094 trillion won and operating profit of 4.1246 trillion won for the second quarter of 2026. Revenue increased 30.2% from a year earlier, while operating profit surged 262.2%.

For the first half of the year, cumulative revenue reached 42.0113 trillion won and operating profit totaled 6.9594 trillion won.

HD Korea Shipbuilding & Offshore Engineering, the group’s shipbuilding and marine holding company, reported revenue of 8.9270 trillion won and operating profit of 1.6451 trillion won. The results were driven by higher productivity and increased sales of high-margin vessels. Revenue rose 20.2% year over year, while operating profit increased 72.5%.

HD Hyundai Marine Solution generated revenue of 580.4 billion won and operating profit of 97.6 billion won, benefiting from growth in its ship aftermarket (AM), eco-friendly retrofit and digital solutions businesses. Revenue and operating profit increased 24.1% and 17.6%, respectively, from a year earlier.

HD Hyundai Site Solutions, the group’s construction equipment unit, posted revenue of 2.5235 trillion won and operating profit of 272.0 billion won. Results were supported by improving global market conditions, stronger sales of next-generation excavators and increased demand for industrial and defense engines. Revenue rose 17.9% and operating profit climbed 79.6% from the same period last year.

HD Hyundai Oilbank recorded revenue of 9.4774 trillion won and operating profit of 1.8241 trillion won. Improved profitability in lubricant base oils and petrochemicals helped offset volatility in international crude oil prices.

HD Hyundai Electric reported revenue of 1.1418 trillion won and operating profit of 287.0 billion won. Growth was driven by higher sales in its power distribution business and improved profitability in overseas markets. Revenue increased 26.0% year over year, while operating profit rose 37.3%.

An HD Hyundai representative said earnings improved across the group’s major businesses, including shipbuilding, construction equipment, refining and power equipment.

The company said it plans to continue enhancing profitability through selective orders focused on high-value-added vessels, expansion into new markets and ongoing improvements in product mix.

Korea Aerospace Industries (KAI) has been selected to lead a government-backed defense project aimed at developing on-device artificial intelligence (AI) semiconductors and validating their performance on unmanned aerial vehicles.

KAI announced on July 31 that it had been named the preferred bidder in the defense segment of the Ministry of Trade, Industry and Resources' K-On-Device AI Semiconductor Technology Development Program. The project has a total budget of 95.3 billion won and will run for five years.

The program seeks to develop a defense-grade system-on-chip (SoC) and an autonomous control system (ACS) incorporating the chip, then integrate the technologies into an unmanned aircraft platform for performance verification.

The project consists of three subprograms. KAI will serve as the overall project coordinator and lead the first and third subprojects, which include development of a high-speed expendable unmanned aerial vehicle, autonomous control systems, system integration and flight testing. The second subproject, focused on AI semiconductor development, will be led by a domestic fabless semiconductor company.

The consortium includes South Korean AI semiconductor developers, AI model companies and research institutions. Samsung Electronics will be responsible for semiconductor manufacturing.

KAI plans to incorporate the AI chip developed through the project into its proprietary AI pilot system, known as K-AILOT. The company also intends to expand the technology to satellite applications, enabling onboard AI chips to analyze data in real time before transmitting it to ground stations.

KAI has been strengthening its AI ecosystem through partnerships. The company signed a memorandum of understanding with Samsung Electronics last year and another with Team Naver—comprising Naver and Naver Cloud—earlier this month. KAI said it is pursuing the development of a sovereign AI framework that combines AI semiconductors, large language AI models and cloud technologies.

Hanwha Aerospace reported quarterly operating profit exceeding 1 trillion won for the first time, supported by strong defense exports and improved performance from its subsidiaries.

The company said on July 31 that it posted consolidated revenue of 9.2929 trillion won and operating profit of 1.3655 trillion won for the second quarter of 2026. Revenue increased 47% from a year earlier, while operating profit rose 59%.

The ground defense business generated revenue of 2.1075 trillion won and operating profit of 533.0 billion won. Revenue rose 19% year over year, while operating profit increased 2%. In South Korea, growth was driven by higher production volumes of the Cheonho wheeled anti-aircraft gun and the Cheongeom. Overseas, shipments to Poland, Egypt and Middle Eastern customers contributed to earnings.

Hanwha Aerospace said its order backlog expanded to 38.3 trillion won following an additional K9 self-propelled howitzer export contract with Finland signed in April and a supplementary Chunmoo multiple launch rocket system supply agreement with Estonia signed in May.

The aerospace business recorded revenue of 760.0 billion won and operating profit of 37.0 billion won. Revenue increased 17% from a year earlier on higher military program volumes, while the division returned to profitability.

Consolidated subsidiary Hanwha Ocean also contributed significantly to earnings growth. Benefiting from a higher proportion of high-margin vessels, including liquefied natural gas (LNG) carriers, Hanwha Ocean posted revenue of 5.4432 trillion won and operating profit of 736.1 billion won. Revenue rose 65% year over year and operating profit increased 98%.

Hanwha Systems reported revenue of 1.1176 trillion won and operating profit of 103.7 billion won, supported by growing defense exports, including multifunction radar (MFR) systems.

In the second half, Hanwha Aerospace plans to continue production under the second execution contract for Poland's K9 program and proceed with K9 deliveries to Egypt and Australia. The company also plans to participate in the South Korean government's advanced aircraft engine development program based on a prototype unmanned aerial vehicle engine it recently unveiled.

Hanwha Ocean has secured a contract worth 838 billion won to complete the detailed design and construct the lead ship of South Korea's next-generation destroyer program, known as KDDX.

The company disclosed on July 31 that it signed a contract with the Defense Acquisition Program Administration (DAPA) for the KDDX detailed design and lead ship construction project. The contract is valued at 838 billion won and runs through June 30, 2032.

DAPA issued the tender in March and selected Hanwha Ocean as the preferred bidder on July 1 following site inspections and proposal evaluations. Hanwha Ocean subsequently completed negotiations covering technical requirements, contract terms and pricing before signing the final agreement.

KDDX is South Korea's first Aegis-class destroyer program to develop both the hull and combat system using domestic technologies. The government plans to invest approximately 7.8 trillion won to acquire six 6,000-ton destroyers. The Republic of Korea Navy plans to commission the lead ship in 2032 and deploy all six vessels by 2036.

Hanwha Ocean and HD Hyundai Heavy Industries competed for the KDDX contract. HD Hyundai Heavy Industries scored 0.6425 points higher than Hanwha Ocean in the technical evaluation. However, a 1.2-point security penalty related to a military secrets leak case reversed the ranking. Hanwha Ocean ultimately received 93.9542 points, compared with 93.3675 points for HD Hyundai Heavy Industries, a margin of 0.5867 points.

The timing and procurement method for the five follow-on vessels have not yet been determined. An industry official said the remaining ships are expected to be ordered around 2028, although authorities have not decided whether they will be procured through a single package or multiple contracts.

Hanwha Ocean plans to equip the KDDX destroyer with nine domestically developed systems. The design will also incorporate a manned-unmanned integrated combat system, a multi-layered defense architecture and a cyber defense framework. Ship automation technologies aimed at reducing crew requirements will also be included.

Since its launch in 2023, Hanwha Ocean has won contracts for the fifth and sixth Ulsan-class Batch-III frigates and the first and second Batch-IV frigates. The KDDX lead ship award further expands the company's surface combatant shipbuilding portfolio.

Korea Aerospace Industries (KAI) has entered into a strategic partnership with Brazilian aerospace manufacturer Embraer to collaborate on aircraft structures.

KAI announced on July 30 that it signed a memorandum of understanding (MOU) with Embraer on July 28 to pursue strategic cooperation in the aircraft structures business.

Under the agreement, the two companies will expand collaboration in research and development (R&D) of new technologies, with an initial focus on aircraft structures. KAI aims to combine its aerospace engineering expertise with Embraer's aircraft development and manufacturing capabilities to strengthen technological competitiveness and improve manufacturing efficiency.

The companies will also explore cooperation in aircraft design, engineering, manufacturing and quality management. In addition, they plan to identify joint initiatives to optimize manufacturing processes and enhance cost competitiveness.

Kim Jong-chul, president of KAI, said the partnership with Embraer represents an important step in expanding the company's collaboration with leading global aerospace manufacturers.