Seoul: Hanwha Systems Co., a defense solutions arm of South Korea's Hanwha Group, announced on Friday a net loss for the fourth quarter, attributing the downturn to costs associated with the acquisition of a U.S. shipyard. The company registered a net loss of 23.9 billion won (US$16.3 million) for the October-December period, a significant shift from the net profit of 359.9 billion won reported the previous year, as disclosed in a regulatory filing.

According to Yonhap News Agency, Hanwha Systems experienced a 67.6 percent decline in operating profit, which fell to 9.4 billion won from 29.1 billion won during the same period. Despite these losses, sales saw a 49.8 percent increase, reaching 1.39 trillion won from 933.4 billion won. A company spokesperson explained that expenses related to normalizing operations at Hanwha Philly Shipyard in Philadelphia, following its acquisition, significantly impacted the quarterly earnings.

The acquisition of the shipyard, completed for 140 billion won in 2024, was part of Hanwha Group's strategic push into the U.S. shipbuilding sector, with aspirations of securing contracts from the U.S. Navy. Hanwha Ocean and Hanwha Systems hold 40 percent and 60 percent stakes in the shipyard, respectively. This acquisition marks the first U.S. shipyard acquisition by a South Korean shipbuilder and is central to the Seoul-backed "Make American Shipbuilding Great Again" (MASGA) initiative.

Throughout 2025, Hanwha Systems reported a net income of 215.9 billion won, reflecting a decrease of 51 percent compared to 445.4 billion won the previous year. The company spokesperson noted that, in addition to acquisition costs, operational expenses at new production facilities in Gumi and Jeju Island also affected the annual profit figures.

Operating profit for the year declined by 43 percent, amounting to 123.6 billion won from 219.3 billion won, while revenue increased by 30 percent to a record 3.66 trillion won from 2.8 trillion won. This marked the first time the company's annual sales surpassed the 3 trillion won threshold. The record sales were attributed to successful defense programs, including K2 tank fire-control systems exports to Poland, multifunction radar sales for the Cheongung-II missile system to the United Arab Emirates and Saudi Arabia, and the second-phase mass production of next-generation military radios.