Hanwha Aerospace (012450.KS) Q1 2026: Margin Hits 11.1% as Cash Burns ₩1.7 Trillion

Operating margin climbed to 11.1% on a 2.5-point drop in the cost ratio, but the same quarter saw operating cash flow swing to a ₩1.7 trillion deficit, plugged by ₩3.1 trillion of fresh borrowings — the cleanest reading of the K9 delivery cycle's peak so far.

Source: Quarterly Report — Filed 2026-05-13 with DART | Consolidated Financial Statements | Unit: ₩ billions

The cost-of-sales ratio fell from 81.2% to 78.7%, lifting the operating margin from 10.2% to 11.1% and producing a 13.9% jump in operating profit on revenue growth of only 4.9% — unambiguous evidence that core profitability is expanding. Yet the same quarter's operating cash flow swung from a ₩167.5 billion outflow a year earlier to a ₩1,714.3 billion outflow, a tenfold widening that was bridged by raising total borrowings ₩3,077.9 billion in a single quarter. The central question of this report is how much of the 11.1% margin and ₩4,999 earnings-per-share headline reflects genuine pricing power from the second wave of Polish K9 deliveries, and how much is the combined effect of a 5.2% effective tax rate, a 50.5% minority-interest share, and ₩1,974.8 billion of working-capital absorption that may not repeat.