Current Net Income of Overseas Operations Fell 9.9% in 2013

The current net income of Korean companies’ overseas subsidiaries plummeted last year due to the drop in the prices of natural resources that affected mining companies.

According to the Export-Import Bank of Korea’s data covering 5,738 such corporations, their combined current net income decreased by 9.9 percent from a year earlier to US$13.5 billion at the end of last year, with the average per company dropping by 18.3 percent to US$2.35 million. The mining sector recorded a net loss of US$325 million during the period.

These companies’ average sales reached US$130 million. Both the sales and total asset growth rates decreased from 21.8 percent to 10.7 percent and from 22.1 percent to 9.3 percent, respectively. The debt ratio fell from 169.9 percent to 161.4 percent, and the ratio of borrowing to total assets decreased from 25.7 percent to 25.5 percent. The current ratio went up from 127.0 percent to 130.1 percent.

Domestic investors posted a return on investment of US$16.92 billion via their branches, and the net exports of parent companies to overseas corporations increased from US$74.5 billion to US$94.1 billion between 2012 and 2013.

“The overseas corporations play a very important part in the national economy with their sales accounting for 36 percent of the sales of the parent companies in the manufacturing sector,” the bank explained, adding, “It is expected that their business performance will have an increasing significance in Korean companies’ global competitiveness.”