Korean Companies Overcome '3 Highs' and Raw Material Price Surge, Increase First Half Sales by 28%

CEO Score Survey of Top 500 Companies by Sales
337 Companies Responded... Significant Growth in Petrochemicals and IT Sectors

[Image source=Yonhap News]

[Asia Economy Reporter Moon Chaeseok] Major Korean companies overcame management risks such as high inflation, high interest rates, high exchange rates?the '3 highs'?and soaring raw material prices in the first half of the year, increasing their sales by nearly 30% compared to last year.

On the 17th, CEO Score, a corporate data research institute, surveyed the first half performance of 337 companies out of the top 500 domestic companies that submitted their 2022 semi-annual reports by the previous day. The total sales of these companies in the first half of this year amounted to KRW 1,641.0303 trillion, an increase of KRW 358.2567 trillion (27.8%) from last year's KRW 1,282.7736 trillion.

By industry, sales increased in 19 out of 20 sectors. Due to the impact of high oil prices, the petrochemical sector's sales rose from KRW 152.5466 trillion last year to KRW 220.3030 trillion this year, an increase of KRW 67.7564 trillion (44.4%), marking the largest growth.

Notably, the information technology (IT) and electrical and electronics sectors overcame adverse market conditions such as falling memory semiconductor prices. Sales in the IT and electrical and electronics sectors increased by KRW 45.3488 trillion (19.5%). Banks (KRW 45.1529 trillion, up 71.7%), securities (KRW 41.9186 trillion, up 68.4%), and automobiles and parts (KRW 21.7666 trillion, up 14.7%) followed.

However, the telecommunications sector was the only one to shrink compared to last year. Telecom sales decreased by KRW 4.669 trillion (1.6%), from KRW 28.4180 trillion in the first half of last year to KRW 27.9512 trillion this year.

Operating profit totaled KRW 125.3881 trillion, up 7.5% (KRW 8.774 trillion) from KRW 116.6141 trillion in the same period last year.

The IT and electrical and electronics sectors showed the largest increase. Their operating profit in the first half was KRW 41.7259 trillion, up KRW 8.8205 trillion (26.8%) from KRW 32.9054 trillion last year. Other sectors with significant increases included transportation (KRW 5.9808 trillion, up 165.2%), petrochemicals (KRW 3.9075 trillion, up 23.7%), automobiles and parts (KRW 2.186 trillion, up 26.0%), steel (KRW 1.9718 trillion, up 30.8%), shipbuilding, machinery, and equipment (KRW 1.3984 trillion, turning to profit), and banks (KRW 1.1226 trillion, up 11.9%).

Conversely, four sectors saw a decline in operating profit compared to last year: public enterprises (KRW 15.0303 trillion, turning to deficit), securities (KRW 3.1591 trillion, down 45.4%), household goods (KRW 523.2 billion, down 20.9%), and construction and building materials (KRW 249.2 billion, down 5.9%).

By company, Samsung Electronics recorded the largest sales increase. Samsung Electronics' sales in the first half of this year were KRW 154.9851 trillion, up KRW 25.925 trillion (20.1%) from KRW 129.0601 trillion last year. In contrast, LG Display's sales in the first half of this year were KRW 12.0788 trillion, down KRW 1.7695 trillion (12.8%) from last year, marking the largest decrease.

Samsung Electronics' operating profit in the first half increased by KRW 6.2688 trillion (28.6%) from the previous year to KRW 28.2185 trillion, the largest increase. Korea Electric Power Corporation (KEPCO) recorded the largest decrease, with operating losses increasing by KRW 14.1101 trillion from KRW 193.1 billion in the first half of last year to KRW 14.3033 trillion.