CEO Score Q3 Cumulative Free Cash Flow Survey
Lower Amount Indicates Poorer Financial Condition and Lower Dividend Capacity
Kiwoom, KEPCO, Samsung Electronics in Order... Samsung Electronics Shows Largest Decrease
The cumulative free cash flow (FCF) of the top 500 listed companies in South Korea has turned negative. FCF refers to the cash remaining after deducting taxes, operating expenses, and capital expenditures (such as facility investments) from a company's earnings (operating cash flow). The lower the FCF, the worse the company's financial condition and the lower its dividend capacity.
On the 13th, CEO Score, a corporate data research institute, surveyed the FCF based on individual financial statements of 265 out of the top 500 domestic listed companies by sales. The cumulative amount for the first to third quarters of this year was recorded at -2.5787 trillion KRW. This sharply declined from 56.6987 trillion KRW in the first to third quarters of 2021, 2.5782 trillion KRW in the same period last year, to -2.5787 trillion KRW this year.
The cumulative operating cash flow this year was 82.0031 trillion KRW, an increase of 0.8% compared to the same period last year, while the cumulative capital expenditure was 84.5818 trillion KRW, up 7.4%. This means that more money went out than came in.
The view of Samsung Electronics Seocho Building in Seoul on October 11th. [Photo by Jinhyung Kang aymsdream@]
By industry, the automotive and parts sector had the highest FCF, accumulating 17.3531 trillion KRW through the third quarter. Holdings (6.4839 trillion KRW) and transportation (4.4497 trillion KRW) followed.
By company, Kia (7.248 trillion KRW) rose from 4th to 1st place with a 76.4% increase compared to the same period last year. Hyundai Motor Company (6.0269 trillion KRW) also surged from 18th to 2nd place with a 546.9% increase. Hyundai Mobis (2.704 trillion KRW) ranked 3rd among general companies.
Among public enterprises, Korea Gas Corporation had the highest cumulative FCF at 4.8584 trillion KRW. Among financial companies, KB Financial Group (2.0942 trillion KRW), KakaoBank (1.8458 trillion KRW), DB Insurance (1.8342 trillion KRW), Hana Financial Group (1.7076 trillion KRW), and Hyundai Marine & Fire Insurance (1.6876 trillion KRW) ranked high.
There were 18 companies with cumulative FCF exceeding 1 trillion KRW: 9 general companies (non-financial), 8 financial companies, and 1 public enterprise.
Companies with cumulative FCF deficits exceeding -1 trillion KRW included Industrial Bank of Korea (-14.9051 trillion KRW), Korea Electric Power Corporation (-14.3792 trillion KRW), Samsung Electronics (-7.8785 trillion KRW), SK Hynix (-4.4324 trillion KRW), and LG Display (-3.5587 trillion KRW), totaling 12 companies.
Among the 265 companies, 154 (57.7%) saw an increase in FCF compared to the previous year. However, the semiconductor industry downturn caused Samsung Electronics' FCF to drop significantly, impacting the overall figures.
Samsung Electronics' year-over-year decrease was 11.8238 trillion KRW, the largest decline among the 265 companies. HMM followed with a decrease of 9.3973 trillion KRW.
Companies with the largest FCF increases included Korea Gas Corporation (11.0957 trillion KRW) and Korea Electric Power Corporation (9.313 trillion KRW). The increase in public enterprises' FCF is analyzed to be due to a base effect compared to last year.
Among general companies, Hyundai Motor Company (5.0953 trillion KRW), Kia (3.1392 trillion KRW), POSCO Holdings (2.6495 trillion KRW), and HDC Hyundai Development Company (2.0778 trillion KRW) showed the largest increases. Among financial companies, Samsung Card had the highest increase at 3.1852 trillion KRW.
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