CEO Score, Survey of 337 Companies... 11.4% Decrease YoY
Declines in Public Enterprises, IT Electronics, Steel, and Distribution Sectors
An employee entering the lobby of the Korea Electric Power Corporation headquarters in Bitgaram Innovation City, Naju-si, Jeollanam-do. (Image source=Yonhap News)
[Asia Economy Reporter Moon Chaeseok] Operating profits of major domestic conglomerates, which showed growth until the first half of the year, have started to decline again. Due to the impact of the three highs (high exchange rates, high oil prices, and high interest rates), the decrease in operating profits was significant in public enterprises, IT electronics, steel, distribution, and securities sectors. Korea Electric Power Corporation (KEPCO) recorded an operating loss of about 7.5 trillion won in the third quarter alone, earning the stigma of the largest deficit company.
On the 15th, CEO Score, a corporate data research institute, investigated the third-quarter performance of 337 companies out of the top 500 domestic companies by sales that disclosed their results by the previous day. The total operating profit of these companies was 47.4559 trillion won, down 11.4% from 53.5696 trillion won in the same period last year.
Among the 20 industries surveyed, operating profits decreased in 9 industries. In the case of public enterprises, the third-quarter operating loss was 5.9425 trillion won, increasing the deficit by 4.768 trillion won compared to 1.1745 trillion won in the same period last year. Operating profits in IT electronics decreased by 3.4118 trillion won, and the steel (1.0513 trillion won↓), distribution (1.5663 trillion won↓), and securities (1.2277 trillion won↓) sectors also showed a decline of over one trillion won in operating profits.
On the other hand, the banking and transportation sectors saw a significant increase in operating profits. The third-quarter operating profit of banks was 6.174 trillion won, an increase of 2.3068 trillion won from 3.8672 trillion won in the same period last year, marking the largest growth. Transportation operating profits were 4.5337 trillion won, up 1.9465 trillion won from 2.5872 trillion won last year. Construction and building materials (899.3 billion won↑), insurance (772.4 billion won↑), food and beverage (544.4 billion won↑), trading companies (311.2 billion won↑), pharmaceuticals (277.8 billion won↑), energy (209.5 billion won↑), and automobile and parts (179.4 billion won↑) sectors also saw increases in operating profits.
By company, KEPCO had the largest operating loss. KEPCO's third-quarter operating loss was 7.5309 trillion won, an increase in deficit of 6.5943 trillion won compared to 936.7 billion won in the same period last year. Samsung Electronics followed. Samsung Electronics' third-quarter operating profit was 10.852 trillion won, down 4.9655 trillion won from 15.8175 trillion won in the same period last year. SK Hynix (2.5163 trillion won↓), POSCO Holdings (2.1972 trillion won↓), and LG Display (1.2882 trillion won↓) also showed a decrease in operating profits of over one trillion won. Lotte Chemical (712.2 billion won↓), Daewoo Shipbuilding & Marine Engineering (608.8 billion won↓), and Kia (558.8 billion won↓) followed.
In contrast, Korea Hydro & Nuclear Power's operating profit increased the most in the third quarter, rising by 824.9 billion won compared to the same period last year. Samsung C&T (655.8 billion won↑), Hyundai Oilbank (529.1 billion won↑), GS Caltex (419.8 billion won↑), Korean Air (380.5 billion won↑), Hanwha (348.2 billion won↑), HMM (330.3 billion won↑), and Hana Bank (306.0 billion won↑) also saw increases in operating profits.
Meanwhile, the sales of the surveyed companies in the third quarter of this year reached 993.4371 trillion won, up 33.7% from 697.9916 trillion won in the same period last year. By company, Hana Bank had the largest increase of 14.4501 trillion won, followed by Kookmin Bank (12.4646 trillion won↑), Woori Bank (11.4552 trillion won↑), Meritz Securities (11.4273 trillion won↑), and Hyundai Motor Company (8.8382 trillion won↑).
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