November 19, 2020 12:48
Big Korean companies achieved a turnaround in earnings in the third quarter as lockdown was eased in many parts of the world and people got used to wearing masks.
The Korea Exchange on Wednesday said the third-quarter sales of 590 listed companies amounted to a combined W503.6 trillion (US$1=W1,104). That was down 2.5 percent on-year, but their operating and net profits increased sharply by 27.5 percent to W36.4 trillion and 44.5 percent to W25.6 trillion.
The figures stand in sharp contrast to first- and second-quarter earnings, which plunged due to the coronavirus epidemic.
Even excluding Samsung, which accounts for a whopping 12.2 percent of the combined earnings of the listed companies, a recovery was clearly evident.
Operating profit increased 57.8 percent on-quarter and net profit rose 81.3 percent. But the KRX said that was mainly due to the sharp improvement in the shopping, automobile and steel sectors that had been hit particularly hard the previous quarter.
On the junior Kosdaq the recovery could also be felt. The 958 Kosdaq-listed companies' third-quarter operating profit grew 31.4 percent on-year to W3.55 trillion. Sales also rose 5.3 percent to W50.7 trillion and net profit 3.9 percent to W2.2 trillion.
Market watchers say improvements in global manufacturing and trade led to rising exports of Korean products. Although infections continue to rise in the U.S. and Europe, the global lockdown is not as severe as the first time round, and the prospect of coronavirus vaccines has given economic activities a fillip.
The latest trend has prompted brokerages to raise projections for next year. They forecast that Korean companies' operating profit will increase 63.5 percent in the first quarter of 2021 and around 42 percent in the second.
Samsung Securities analyst Chung Myung-ji said, "Exports started showing clear signs of a rebound starting around two months ago. The domestic stock market will continue to rise for the time being, with the KOSPI close to a historic high."
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