The operating profits of listed companies affiliated with South Korea's top 10 business groups in the first half of this year dropped by 54 percent from the same period last year. The operating profits in the second quarter fell to nearly a third compared with a year ago.
The combined operating profits of 90 listed companies affiliated with the nation's 10 largest business groups, excluding financial firms, totaled 21.30 trillion won (US$17.59 billion) in the first six months of this year, down 53.52 percent from a year earlier, according to market researcher Inforbix's analysis released on Aug. 18.
The operating earnings for the second quarter, in particular, plunged a whopping 63 percent on-year to 8.11 trillion won (US$6.70 billion) from 21.92 trillion won (US$18.10 billion) at the same period last year.
The operating margin of the affiliates of the top 10 business groups stood at 6.59 percent in the first half of this year, halved from 13.73 percent a year earlier. The figure for the second quarter slipped to 4.95 percent, far below half of last year’s figure at 12.98 percent.
By group, only Hyundai Motor Group and Hyundai Heavy Industries Group posted a gain in operating profits in the first half of the year, while the remaining eight groups suffered a setback.
Notably, Hanhwa Group saw the biggest plunge in operating earnings among the top 10 business groups as its operating profits went down by 72.8 percent from 434.10 billion won (US$358.46 million) to 118 billion won (US$97.44 million) in the first half of the year owing to poor performance of Hanwha Chemical Corp. at -71.87 percent and Hanwha Corp. at -63.90 percent.
Samsung Group, the nation's top conglomerate, also saw its operating earnings dip 65.86 percent on-year from 23.27 trillion won (US$19.22 billion) to 7.94 trillion won (US$6.56 billion) over the period as its flagship unit Samsung Electronics Co. had a 69.91 percent drop in operating profits because of the economic decline in the global semiconductor market.
The operating earnings of Hanjin Group also decreased by 63.07 percent from 370.10 billion won (US$305.62 million) to 136.70 billion won (US$112.88 million) as its flagship unit Korean Air Lines Co. saw its operating profit drop 81.96 percent.
SK Group's operating profits tumbled 61.13 percent from 13.36 trillion won (US$11.04 billion) to 5.19 trillion won (US$4.29 billion) because its chipmaking unit SK Hynix Inc. suffered a 83.93 percent plunge in its operating earnings due to the slowdown in the semiconductor market.
In addition, Lotte Group and Shinsegae Group recorded a double-digit decrease in operating profits at 32.01 percent and 30.66 percent, respectively, while LG Group and GS Group showed a minus growth of 22.82 percent and 21.99 percent.
In contrast, Hyundai Motor Group's operating earnings jumped 38.55 percent from 2.46 trillion won (US$2.03 billion) to 3.40 trillion won (US$2.81 billion)as the operating profits of Kia Motors Corp. and Hyundai Motor Co. grew 250.13 percent and 85.64 percent, respectively, thanks to the weak local currency and strong demand for new models
Hyundai Heavy Industries Group’s operating earnings also rose 22.87 percent from 233.50 billion won (US$192.82 million) to 286.90 billion won (US$236.91 million) as Korea Shipbuilding & Offshore Engineering Co. turned a profit.
Meanwhile, the combined sales of listed companies affiliated with the top 10 business groups came to 323.32 trillion won (US$266.98 billion) in the first half of the year, down 3.10 percent from a year ago. Seven business groups showed a minus growth in sales, including SK Group with -18.38 percent, Hanwha Group with -14.24 percent, GS Group with -8.64 percent, Hyundai Heavy Industries with -7 percent, Samsung Group with -6.63 percent, Lotte Group with -3.84 percent and LG Group with -0.11 percent.
In contrast, Hyundai Motor saw its sales grow 10.23 percent, while Hanjin Group and Shinsegae Group had a slight increase with 1.26 percent and 0.74 percent, respectively.
Meanwhile, the combined net profits of listed companies affiliated with the top 10 business groups slipped 41.27 percent to 21.25 trillion won (US$17.56 billion). Hanjin Group was the only one to record a loss, with its net losses reaching 373.70 billion won (US$308.84 million).