Driven by Memory Chipmakers
South Korea’s top 100 listed firms saw a 35 percent jump in operating profit last year on the back of a stronger global economy. However, earnings growth averaged 9 percent on-year when excluding Samsung Electronics and SK Hynix.
According to industry tracker Chaebol.com on Feb. 25, the combined consolidated operating profit of the country's top 100 listed firms in terms of sales as of Feb. 23 came to 166.54 trillion won (US$155.04 billion), up 34.7 percent from 123.63 trillion won (US$115.09 billion) a year earlier. Their sales also grew 10.5 percent to 1,875.4 trillion won (US$1.75 trillion won).
The top 100 listed companies saw their operating profit margin rise 1.6 percent points to 8.9 percent in 2017 from 7.3 percent a year ago, boosted by an increase in both sales and operating profits.
However, there were mixed results by industry. The electronics, financial and steel industries showed a favorable tendency, while the automotive, shipbuilding, construction and telecommunications sectors showed a slump.
South Korea's number one tech giant Samsung Electronics and chipmaker SK Hynix saw their margins surge by record figures. Samsung Electronics’ consolidated operating profits last year stood at 53.65 trillion won (US$49.96 billion), up 83.5 percent from a year earlier. Its operating profit margin increased 7.9 percent points from 14.5 percent in 2016 to 22.4 percent in 2017, reaching an all-time high.
SK Hynix showed a better improvement. The company saw its operating profits rise as much as 319 percent to 13.72 trillion won (US$12.78 billion) from 3.28 trillion won (US$3.05 billion) a year ago. Its operating profit margin also had more than doubled from 19.1 percent in 2016 to 45.6 percent last year.
However, the operating margin growth of the nation’s top 100 listed firms averaged out at 9 percent, excluding Samsung Electronics and SK Hynix.
South Korea’s top three financial groups – KB Financial Group, Hana Financial Group and Shinhan Financial Group – also saw their operating profits rise 139.5 percent, 68.4 percent and 23.2 percent, respectively, to 4.02 trillion won (US$3.74 billion), 2.72 trillion won (US$2.53 billion) and 3.83 trillion won (US$3.57 billion).
On the other hand, Hyundai Motor posted 4.57 trillion won (US$4.26 billion) in operating profit last year, down 11.9 percent from the previous year. Its operating profit margin also dropped 0.8 percent point to 4.7 percent in 2017. In addition, Kia Motors recorded a whopping 73.1 percent drop to 662.2 billion won (US$617.03 million) last year and its operating profit margin stood at 1.2 percent. Hyundai Mobis also saw its operating profit shrink 30 percent in 2017.
South Korea’s shipbuilding giant Hyundai Heavy Industries posted 14.6 billion won (US$13.6 million) in operating profit last year, showing a whopping 96.3 percent decline from a year ago. The company’s operating profit margin recorded a mere 0.1 percent last year.