PER, EPS, PBR and BPS are calculated in-house from the last 4 quarters (2025Q3–2026Q2) · Dividend yield is based on ₩1,000 per share · Prices as of the 2026-10-02 close
With domestic cement shipments stuck near a three-decade low, Hanil Cement posted a margin recovery signal in 2Q26 as operating profit rose even on lower revenue, following a sharp earnings drop in 2025.
In 2025 consolidated revenue was KRW 1,423.9bn with operating profit of KRW 132.7bn, cutting the operating margin to 9.3% from 15.6% a year earlier. Versus 2024 operating profit of KRW 271.4bn, profit roughly halved.
In 2Q26 revenue was KRW 371.0bn and operating profit KRW 61.6bn, lifting the operating margin to about 16.6%. Revenue fell versus 2Q25 (KRW 407.6bn), yet operating profit rose from KRW 47.5bn.
End-demand remains weak: the Korea Cement Association projects 2026 domestic shipments at around 36m tonnes, implying a possible second straight record low.
The November 1, 2025 absorption of Hanil Hyundai Cement eliminated non-controlling interests, so all of year-end 2025 equity is attributable to owners, while the debt-to-equity ratio held at 62.4%, similar to the prior year.
About KRW 180bn of environmental capex including new SCR units is planned for 2026, with the rating agency expecting capex needs to shrink from 2027.
Hanil Cement was established on July 1, 2018 through the spin-off of the building-materials arm of Hanil Holdings (formerly Hanil Cement), and operates cement together with related businesses such as ready-mixed concrete and Remital dry mortar.
It holds a top-tier position in domestic cement shipments, and as of end-March 2025 its largest shareholder was Hanil Holdings with 63.5%, or 75.8% including related parties.
Cement is sold mainly in bulk to builders and ready-mix producers, while Remital is a bagged product reaching small-scale construction and repair demand, making it somewhat less cyclical than bulk cement.
Ready-mixed concrete internalizes part of cement demand but, as a locally delivered product, is the most directly exposed to swings in construction starts.
On November 1, 2025 the company merged with its consolidated subsidiary Hanil Hyundai Cement (previously 77.78% owned); in a December 2025 report Shinhan Securities said the merger should cut overhead and expand share, putting the company at roughly 21.5% of domestic shipments, second in the industry.
Korea's cement market is an oligopoly left after restructuring and M&A, comprising Sampyo Cement, Ssangyong C&E, Hanil Cement, Asia Cement, Sungshin Cement and Halla Cement. Because more than 90% of industry revenue comes from the domestic market, local shipment volumes directly drive profitability.
On the production side, the company has since 2023 pursued preheater tower upgrades at major plants and installed ECO waste-heat power generation at the Yeongwol plant.
On asset efficiency, Korea Investors Service said in its April 2026 report that proceeds of about KRW 67.5bn from the sale of the Busan plant were due to be received in June 2026.
| Quarter | Revenue | Operating profit | Op. margin |
|---|---|---|---|
| 2025Q2 | ₩407.6B | ₩47.5B | 11.7% |
| 2025Q3 | ₩357.8B | ₩50.7B | 14.2% |
| 2025Q4 | ₩360.2B | ₩17.6B | 4.9% |
| 2026Q1 | ₩293B | ₩17B | 5.8% |
| 2026Q2 | ₩371B | ₩61.6B | 16.6% |
| Year | Revenue | Operating profit | Net income (parent) | Op. margin | ROE | Debt-to-equity |
|---|---|---|---|---|---|---|
| 2022 | ₩1.5T | ₩118B | ₩78.8B | 7.9% | 5.4% | 56.2% |
| 2023 | ₩1.8T | ₩246.5B | ₩170.2B | 13.7% | 10.7% | 66.8% |
| 2024 | ₩1.7T | ₩271.4B | ₩184.1B | 15.6% | 10.7% | 62.5% |
| 2025 | ₩1.4T | ₩132.7B | ₩74.2B | 9.3% | 4.0% | 62.4% |
Consolidated basis (financial statements including subsidiaries) · Final figures from DART filings · Net income attributable to owners of the parent · Data as of 2026-09-04
Annually, revenue moved from KRW 1,487.6bn in 2022 to KRW 1,799.5bn in 2023 and KRW 1,741.7bn in 2024, before falling back to KRW 1,423.9bn in 2025.
Profit swings were wider: operating profit expanded from KRW 118.0bn (7.9% margin) in 2022 to KRW 246.5bn (13.7%) in 2023 and KRW 271.4bn (15.6%) in 2024, then contracted to KRW 132.7bn (9.3%) in 2025, while owners' net profit fell from KRW 184.1bn in 2024 to KRW 74.2bn in 2025.
Korea Investors Service attributed the 2025 decline to a deeper deterioration in the ready-mix and dry-mortar segments amid a prolonged construction downturn, plus some non-recurring losses in other businesses.
Quarterly data show clear seasonality and cost sensitivity: 2Q25 revenue was KRW 407.6bn with operating profit of KRW 47.5bn and 3Q25 KRW 357.8bn with KRW 50.7bn, both double-digit margins, but 4Q25 revenue of KRW 360.2bn produced only KRW 17.6bn of operating profit, and 1Q26 delivered KRW 293.0bn and KRW 17.0bn.
Those first-quarter figures match the industry tally reported by the press (revenue KRW 293.0bn, operating profit KRW 17.0bn). By contrast, 2Q26 revenue of KRW 371.0bn was below the year-ago quarter, yet operating profit rose to KRW 61.6bn for a mid-16% margin, with owners' net profit of KRW 48.4bn.
Given that industry commentary in July 2026 pointed to a weak second quarter and further deterioration in the second half, the actual margin improvement suggests pricing, cost or mix effects offset lower volumes.
Operating cash flow swung from negative KRW 0.9bn in 2022 to KRW 246.3bn in 2023 and KRW 244.7bn in 2024, easing to KRW 160.6bn in 2025, while the debt-to-equity ratio declined from 66.8% in 2023 to 62.4% in 2025.
Domestic cement demand is in structural contraction. TheBell reported that 2025 domestic shipments hit a 34-year low of 36.5m tonnes, noting volumes had never fallen below 40m tonnes since 1991.
That said, Newspim, citing the Korea Cement Association, put last year's figure at 38.1m tonnes, so numbers differ by measurement basis. The association forecasts 2026 domestic shipments of about 36m tonnes, down 1.4% year on year, citing continued declines in building starts and construction work done.
Cost structure is another burden. Production costs consist of electricity, logistics and fuel, with power at roughly 30% of manufacturing cost and bituminous coal fuel at 20-25%, together about half. Industrial electricity tariffs have risen roughly 70% across seven increases since 2022.
On top of that, Middle East conflict pushed crude above USD 100 per barrel in 2026, and Korean cement makers, which import all their coal by sea, face higher freight and insurance costs.
On regulation, meeting the 2035 national greenhouse gas target is estimated to require about KRW 3tn of industry capex plus roughly KRW 120bn of annual operating cost.
Working the other way, the temperature-adjusted strength rule introduced last year mandates higher winter concrete strength, raising cement content per unit of concrete.
The company does not publish formal earnings guidance, but its investment and funding plans are partly visible through credit research.
Korea Investors Service said about KRW 180bn of capex is planned for 2026, including new SCR units and preheater tower upgrades, and that with major environmental projects completing in stages from late 2024 through 2026, capex needs should shrink from 2027.
The same report expected solid operating cash generation, returns from environmental investment and Busan plant sale proceeds to fund much of the investment and dividend outflow, keeping financial burden manageable. Net debt rose from KRW 271.7bn at end-2021 to KRW 483.1bn at end-2025.
Industry-wide investment capacity is also shrinking: the Korea Cement Association's review of 2025 spending and 2026 plans put 2026 industry capex at KRW 429.7bn, down 10% from KRW 472.6bn. Views on demand recovery remain cautious.
In a December 2025 report, Shinhan Securities said construction start areas had yet to turn up and that, given the lag from starts to concrete and cement shipments, meaningful volume growth was unlikely through 2026.
Industry commentary similarly framed the first-quarter improvement as a temporary regulatory effect, with structural recovery dependent on construction activity.
Conversely, share gained through the merger, overhead savings and cost benefits from completed environmental facilities are variables that can affect margins even without volume growth.
Valuation for this company shifts sharply with the reference period because earnings amplitude is large. Profit halved in 2025 from the 2024 peak and then turned back up in 2Q26, so earnings-based multiples read very differently depending on which stretch of profit is used.
The share price sits below reported book value per share, a pattern often seen in construction materials names during demand contraction.
On dividends, Hanil Holdings and Hanil Cement disclosed in December 2025 that the 2025 year-end dividend would be kept at the prior-year level, with Hanil Cement's total dividend at KRW 73.1bn, maintaining a high-payout stance even at the trough in domestic shipments.
Hanil Cement's compound annual dividend growth rate from 2021 to 2025 was 19.5%. That said, net debt has risen as environmental capex and dividend payments overlapped, so dividend durability depends on the balance between operating cash generation and investment needs.
PER, EPS, PBR and BPS are all calculated in-house (the same method as Naver and Toss) · Dividend yield = cash dividend per share from DART filings (supplemented by KRX) ÷ current price · As of 2026-09-04
In 2Q26 revenue of KRW 371.0bn was below 2Q25's KRW 407.6bn, yet operating profit rose from KRW 47.5bn to KRW 61.6bn. Compared with the weak prior two quarters (KRW 17.6bn in 4Q25 and KRW 17.0bn in 1Q26), the shift is substantial.
Whether pricing, mix or cost control drove it needs confirmation in the quarterly filing, but the quarter showed profit can improve without volume growth.
In a December 2025 report, Shinhan Securities expected overhead savings and share gains after the Hanil Hyundai Cement merger, putting domestic shipment share at about 21.5%, second in the industry. The domestic market has consolidated into an oligopoly of a few remaining producers.
With non-controlling interests eliminated by the merger, all of the KRW 1,868.4bn of year-end 2025 equity is attributable to owners, raising the share of earnings accruing to controlling shareholders.
Korea Investors Service expects capex-related funding needs to shrink from 2027 after about KRW 180bn of spending in 2026. The same report said roughly KRW 67.5bn from the Busan plant sale was due in June 2026.
Operating cash flow of KRW 160.6bn in 2025 shows cash generation held up despite lower profit, and the debt-to-equity ratio is managed around 62.4%.
Newspim reported that cement demand has shrunk structurally due to a mature construction and infrastructure market, carbon-neutrality regulation, rising energy and input costs, and wider use of admixtures and new construction methods.
On the association's forecast, 2026 domestic shipments fall further to about 36m tonnes. If this reflects an eroding demand base rather than a simple cycle, price increases alone may not fully offset revenue decline.
Coal fuel and electricity together account for roughly half of manufacturing cost. Since the 2026 Middle East conflict, crude has topped USD 100 per barrel while freight and insurance rose together, inflating imported coal costs.
Kilns must run 24 hours a day, limiting the ability to respond to time-of-use electricity pricing. These cost variables lie largely outside company control and widen the swing in quarterly margins.
Industry capex to meet the 2035 national emissions target is estimated at about KRW 3tn, with annual operating costs of roughly KRW 120bn. Low-carbon cement costs about 20% more to produce, yet weak mandatory-use rules make it hard to pass that through in price. The company is also executing 2026 investments including new SCR units, which can keep depreciation elevated.
In its December 2025 report, Shinhan Securities noted the 12-month moving average of construction start area for rebar and steel-frame structures worsened from a 2.6% year-on-year decline in 2Q25 to an 11.4% decline in 3Q25.
Because there is a lag from starts to cement shipments, weaker leading indicators feed into later-quarter volumes. Even with more public and civil works orders, recovery in ready-mix and dry mortar could be delayed if private housing starts fail to turn.
Cement prices depend on negotiations with ready-mix producers and builders; in past rounds, builders demanded cuts citing lower coal prices while cement makers resisted, citing environmental capex burdens.
There is precedent for prices being effectively coordinated in a forum involving government ministries and industry associations, leaving room for policy intervention. The durability of margin improvement therefore hinges on negotiation outcomes.
Environmental capex and dividend payments lifted consolidated net debt from KRW 271.7bn at end-2021 to KRW 483.1bn at end-2025. Operating cash flow of KRW 160.6bn in 2025 was down from KRW 244.7bn in 2024, and large investments are again scheduled for 2026. If a high-payout stance and heavy capex continue while profit recovery lags, financial headroom could narrow.
3Q26 quarterly filing. The key checks are whether the mid-16% operating margin seen in 2Q was one-off, and how shipment volumes and costs moved across the cement, ready-mix and dry-mortar segments.
Whether 2027 cement and ready-mix price talks begin and how they progress. Past rounds have followed a sequence in which ready-mix producers and builders negotiate after cement price increases.
Disclosure of the 2026 year-end dividend. A year earlier the company announced in mid-December that it would keep the payout unchanged, maintaining its stance even at the industry trough. This will show how dividend policy tracks the pace of profit recovery.
The Korea Cement Association's 2026 domestic shipment tally, 2027 outlook and industry capex plan. The association publishes prior-year spending and current-year plans annually; the 2026 plan was KRW 429.7bn, down 10% year on year.
Completion and actual spending on environmental facilities such as new SCR units and preheater upgrades. The question is whether the expectation of reduced capex needs from 2027, after roughly KRW 180bn in 2026, shows up in actual cash flow.
Hanil Cement is operating through a period in which Korean domestic cement shipments have fallen to their lowest level in more than three decades.
The imprint on results is clear: operating profit shrank from KRW 271.4bn (15.6% margin) in 2024 to KRW 132.7bn (9.3%) in 2025, and quarterly operating profit stayed below KRW 20bn in 4Q25 and 1Q26.
In 2Q26, however, operating profit rose to KRW 61.6bn even as revenue fell year on year, turning margins back up, and the key item to verify in the next filing is whether that came from pricing, costs or mix.
Supportive factors include share and cost-structure changes from the Hanil Hyundai Cement merger, the expected easing of capex from 2027, and a dividend stance maintained through the trough.
On the other side sit the association's projection of around 36m tonnes of domestic shipments in 2026, external shocks to power and fuel costs that make up roughly half of manufacturing cost, and trillion-won-scale industry investment tied to the 2035 emissions target.
It also matters that net debt has risen from end-2021 levels while investment and dividends must be funded simultaneously. This material is for information purposes only and contains no buy or sell recommendation or target price.
Report written 2026-09-05 · Data as of 2026-09-04
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