Data shows Korean economy heavily reliant on top two groups


Earnings of Samsung Electronics, Hyundai Motor and Kia Motors are expected to account for more than half of those reaped by the nation’s 30 major firms this year, a local financial data provider said on Tuesday

According to FnGuide, the 30 largest enterprises are estimated to post a collective net profit of about 67.5 trillion won ($60.2 billion) this year.

Among them, the profits of three ― Samsung, Hyundai and Kia ― are projected to reach 36.7 trillion won, taking up 54.3 percent of the total estimate.

Samsung Electronics, the flagship unit of Samsung Group, is likely to account for 34 percent, or 22.7 trillion won, of the combined 67.5 trillion won.

Earnings of Hyundai Motor and its affiliate Kia Motors are projected to come to 9.6 trillion won (14 percent of the total) and 4.5 trillion won (7 percent), respectively.

Last year, net profit of the three enterprises took up 44 percent, or 25.4 trillion won, of 57.3 trillion won earned by the 30 major firms.

Some economists say that the Korean economy is critically at risk as it has been heavily dependent upon the two largest conglomerates ― Samsung Group and Hyundai Motor Group.

According to data from the Korea Exchange and chaebul.com, a conglomerate-tracking website, Korea saw the earnings gap between Samsung-Hyundai Motor groups and the eight other major conglomerates widen this year.

During the first half of the year, subsidiaries of Samsung and Hyundai Motor accounted for more than half of the combined operating profit of all companies listed on stock markets.

Samsung affiliates reported an operating profit of 11.6 trillion won in the first half, up 59.8 percent from the same period last year.

Hyundai Motor affiliates saw their operating profit increase 12.5 percent to 6.4 trillion won on a year-on-year basis. The two groups’ combined operating profits amount to 50.6 percent of the total operating profits made by all listed companies except for financial firms.

In contrast, LG, SK and Lotte groups suffered a drop in operating profit of 4.5 percent, 31.3 percent and 37.5 percent, respectively.

Hyundai Heavy Industries and GS Group reported a 49.4 percent and 47.8 percent fall in first-half earnings. Similarly, Hanjin Group posted a deficit of 258.8 billion won.

Earnings of Samsung Group accounted for 32.6 percent of the combined figure of the 10 groups, compared to 17.8 percent a year earlier. Hyundai Motor Group’s proportion climbed from 14 percent to 18 percent.

Foreign investors are cutting back their stakes in major Korean companies amid a sliding stock market hard hit by the European debt crisis.

But they are expanding ownership at Samsung and Hyundai affiliates, according to chaebul.com.

By Kim Yon-se (kys@heraldcorp.com)