May 03, 2021 11:10
State-run companies suffered W600 billion in net losses in 2020 (US$1=W1,113).
According to government data announced on Sunday, the combined net profits of state-run companies has fallen steadily since 2016 and shifted into the red last year. Of the country's 36 state enterprises, 18 or half lost money.
In addition to KORAIL and Korea Coal Corporation, which have suffered losses for the last five years, 11 others posted losses, including the Korea Racing Authority, Incheon International Airport Corporation and Korea Airports Corporation due to the coronavirus pandemic. Korea Gas, Korea Western Power and other energy companies also lost money due to a decline in global oil prices, the government said.
But experts blame sloppy management. Hong Ki-yong at Incheon National University said, "It's wrong to attribute all of the losses to the pandemic. It's the fault of management that has failed to cut costs as revenues declined."
Despite declining sales, CEO salaries rose to over W200 million a year, and they hired more than 20,000 new workers over the last four years. "Such practices would have been unthinkable in privately run businesses," Hong said.
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