It has been found that the companies listed on the KOSPI and KOSDAQ markets that are closing their books in December suffered from poor profitability in the first half of this year. Those listed on the former recorded some year-on-year increase in operating profits, but their net profits fell during the period. KOSDAQ companies’ operating and net profits were both on the decline.
The Korea Exchange and the Korea Listed Companies Association announced on September 1 that the 620 companies recorded cumulative sales of 574.3 trillion won (US$520.9 billion) on a separate basis in the first half, to post 0.6% growth from a year earlier. Their combined business profits increased 9.0% to 33.41 trillion won (US$30.30 billion), but the net profits decreased by 1.22% to 27.05 trillion won (US$24.5 billion). Although electronics companies boosted their sales thanks to smartphones, the weak yen trend and the delay in the global economic recovery acted as roadblocks to their business during the period.
In the meantime, the turnover and operating profits of KOSPI listed companies for the second quarter of 2013 went up by 2.1% and 14.65% from the previous quarter, but net profits declined by 15.34%. Approximately 30% of those listed on the KOSDAQ market remained in the red, too. According to the KOSDAQ Listed Companies Association, the 900 firms’ combined sales increased by 4.52% year on year to 53.96 trillion won (US$48.94 billion). Meanwhile, their business and net profits fell 15.51% and 18.02% to 2.76 trillion won (US$2.51 billion) and 2.24 trillion won (US$2.04 billion), respectively. The operating income to sales ratio and the ratio of net income to net sales dropped by 1.21 and 1.14 percentage points to 5.12% and 4.16% each. 625 out of the 900 firms were in the black, whereas the other 275 showed losses.
Most of the firms on the KOSDAQ market succeeded in increasing their size from a year ago, but their actual profits declined. The trend was particularly conspicuous for IT firms such as computer service providers, digital content suppliers, and hardware manufacturers.