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Profits of 61 Korean Conglomerates Have Shrunk to Half in Last 4 Years
Withering Away
Profits of 61 Korean Conglomerates Have Shrunk to Half in Last 4 Years
  • By Cho Jin-young
  • April 2, 2015, 04:45
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According to the Fair Trade Commission, the number of conglomerates with total assets of at least 5 trillion won (US$4.5 billion) decreased from 63 to 61 during the past year. The top 10 are Samsung, the Korea Electric Power Corporation (KEPCO), Hyundai Motor, Korea Land & Housing Corporation, SK, LG, Lotte, POSCO, GS, and Hyundai Heavy Industries. 

The 61 conglomerates have 1,696 subsidiaries combined, 19 more than a year earlier. SK has 82 subsidiaries, followed by Lotte with 80, GS with 79, Daesung with 73, Samsung with 67, and CJ with 65. The 61 groups’ combined assets increased by 52.6 trillion won (US$47.9 billion) to 2.2584 quadrillion won (US$2.0582 trillion). Each of the top six has recorded assets exceeding 100 trillion won (US$91 billion) since 2012. 

The debt ratio of the 61 is 101.1 percent, 2.6 percentage points down year-on-year. Hyundai reduced its debt by 93.9 percentage points, Korea Land & Housing Corporation by 48.3, Incheon Development & Tourism Corporation by 34.4, Homeplus by 31.1, and Hanjin by 28.4.

The combined sales of the 61 declined from 1.5366 quadrillion won (US$1.4004 trillion) to 1.5051 quadrillion won (US$1.3717 trillion). That of Samsung fell by 30.2 trillion won (US$27.5 billion), GS missed out on 5 trillion won (US$4.6 billion), SK received 8.7 trillion won (US$7.9 billion) less, and Hyundai Motor didn't see 7.8 trillion won (US$7.1 billion). 

The 61 conglomerates’ current net income decreased from 47.8 trillion won (US$43.6 billion) to 42.1 trillion won (US$38.4 billion). The amount reached 81.7 trillion won (US$74.5 billion) in 2011, but has continued to decline, losing 48.5 percent for four years. 

The top 30 excluding Samsung, Hyundai Motor, SK, and LG recorded a current net loss on average, while the four showed a current net income of 39 trillion won (US$35.5 billion). The sum of those of Samsung (20.9999 trillion won or US$19.1397 billion) and Hyundai Motor (12.677 trillion won or US$11.554 billion) accounted for 69.4 percent of the total of the 61 (48.514 trillion won or US$44.216 billion). The current net incomes of Samsung and Hyundai Heavy Industries declined by 3.9 trillion won (US$3.6 billion) and 3 trillion won (US$2.7 billion), while those of the Korea Railroad Corporation and KEPCO increased by 4 trillion won (US$2.6 billion) and 2.9 trillion won (US$2.6 billion). The losses of Hyundai Heavy Industries and Dongbu amounted to 2.571 trillion won (US$2.344 billion) and 1.757 trillion won (US$1.601 billion), respectively.