Maturing Market
Last year, the listed firms on the KOSPI market saw a rapid drop in operating profits. This is mainly due to the fact that Samsung Electronics’ operating profits decreased to 25 trillion won (US$22.62 billion), a 32 percent decrease from the previous year. Also, other major companies, including Hyundai Motor and LG Chem, showed a drop in operating profits.
According to the 2014 closing performance of the stock market by Korea Exchange (KRX) in December, sales of the 496 companies on the KOSPI reached 1.82 quadrillion won (US$1.65 trillion), based on the analysis of their consolidated financial statements. That is a 0.43 percent decrease from the previous year. Operating profits sank as much as 12.7 percent to 91.42 trillion won (US$82.74 billion), while net profits dropped by 6.9 percent to 61.14 trillion won (US$55.34 billion).
Excluding Samsung, the combined sales of KOSPI firms rose 0.9 percent year-on-year in 2014, and net profits increased 7.1 percent, while operating profits slid 2.3 percent. Among major companies, Hyundai Motor showed a 9.2 percent decrease year-on-year in operating profits, recording 7.55 trillion won (US$6.83 billion), while Kia Motors and LG Chem showed a 19 percent and 1.25 percent drop, respectively. The operating profits of the Korea Electric Power Corporation (KEPCO) jumped by 281 percent to 5.7875 trillion won (US$5.24 billion). SK Hynix also saw growth in operating profits of 51 percent.
The financial soundness of companies listed on the KOSPI market slightly improved. The consolidated debt rate at the end of last year amounted to 127.93 percent, showing a 2.62 percent decrease from the previous year. Total equities reached 941.2173 trillion won (US$851.78 billion), a 6.16 percent increase, while total liabilities totaled 1.2 quadrillion won (US$1.09 trillion), a 4 percent increase.
Among the 496 KOSPI companies, 364 of them, or 73.39 percent, recorded a surplus of consolidated net profits. Among those, 55 who were formerly in the red became to profit-making last year. On the other hand, 132 companies, or 26.61 percent, recorded deficits. According to an analysis, 48 companies turned to a loss.