Major South Korean companies saw their operating profit fall to half in 2019 on-year and have cut their investments by more than 10 percent, amid the worsening global economic crisis, according to a local corporate tracker Wednesday.
CEOScore analyzed the financial records of 358 affiliates of Korea’s conglomerates -- with more than 10 trillion won ($8.2 billion) in assets -- submitted to the Financial Supervisory Service. Booyoung Group, GM Korea and Jungheung Construction were excluded as they have not yet provided the reports.
According to the analysis, their combined sales and operating profit came to 1,332 trillion won and 66 trillion won, respectively, last year. The figure represents a 2.1 percent drop in sales and a 46.5 percent decline in operating profit.
Their combined investments also fell by 12.1 percent to 79 trillion won from 90.5 trillion won. The decline can be attributed to Samsung, SK and LG’s extensive investments in chips and displays last year and the worsening global economy stemming from the US-China trade dispute, the corporate tracker said.
By group, SK’s investment fell by 22.9 percent (4.7 trillion won) with the largest decline. LG and Samsung also reduced 3.3 trillion won and 2.8 trillion won, respectively. S-Oil comes next with 1.2 trillion won.
The investment of Hyundai Heavy Industries, Kolon, Amorepacific and Aekyung also fell by more than 100 billion won.
By company, SK hynix saw the largest decline in investment by a 5.2 trillion won drop from a year earlier. It was followed by LG Display, Samsung Electronics and S-Oil.
On the other hand, LG Uplus and KT, which are heavily investing in 5G networks, ranked first and third in investment growth.
LG Uplus saw the largest growth in investment with an increase of 946 billion won (rise of 58.5 percent) to reach 2.5 trillion won. GS Caltex’s investment increased by 85.4 percent (571 billion won) while KT’s investment grew by 17.5 percent (456 billion won). LG Chem and SK Energy were also in the top five list with a growth of 427.6 billion won and 393.2 billion won, respectively, in investment on-year.
Meanwhile, the employment of large business groups remained flat, with only a slight increase compared to the previous year, the survey showed. At the end of last year, 358 companies employed around 1 million people, up 0.88 percent on-year.
By Shin Ji-hye (email@example.com