Listed Companies' Operating Profits Plummet

  • By Bang Hyeon-cheol

    November 16, 2018 13:50

    Major business groups are seeing their profitability dwindle drastically. If booming semiconductor makers are excluded, the operating profits of major business groups in the first nine months of this year fell around 10 percent compared to the same period last year.

    According to the Korea Exchange and the Korea Listed Companies Association on Thursday, the combined operating profits of 534 listed companies that close their books in December totaled W130.7 trillion in the first three quarters, up 7.88 percent on-year (US$1=W1,130).

    But when semiconductor giants Samsung Electronics and SK Hynix are excluded, their combined operating profit dropped to W65.6 trillion, down 9.94 percent.

    Samsung's operating profit totaled W48.1 trillion and SK's W16.4 trillion, putting the two first and second and accounting for 49.6 percent of the total achieved by all listed companies. The proportion was 39.61 percent in the same period last year.

    The combined net profit of the listed companies in the period totaled W96.5 trillion, up 1.92 percent on-year, but it fell 15.45 percent when Samsung and SK are excluded. Sales rose 5.47 percent to W1,403 trillion and 4.62 percent without Samsung and SK.

    The problem is that there are hardly any factors down the road that could improve matters, and now dark clouds are forming over the semiconductor market as well.

    Analysts worry that falling chip prices could hurt earnings across the board. According to the Bank of Korea, the export price of DRAM in October fell 4.9 percent from the previous month, down for the third month in a row and the biggest decline since April 2016, when it fell 10.8 percent.

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