CEO Score, 2022·2023 Performance Survey of Top 500 Companies
IT and Electrical Electronics Operating Profit Plummets 89.0%
Hyundai Motor and Kia Operating Profit Four Times That of Samsung Electronics
Last year, the operating profit of the top 500 domestic companies decreased by about 26% compared to the previous year. In particular, the decline in operating profits of leading IT electrical and electronics companies such as Samsung Electronics and SK Hynix reached 90%, driving the overall downward trend in operating profits.
According to 'CEO Score' by the Corporate Data Research Institute on the 27th, an investigation into the annual performance of 264 companies among the top 500 domestic companies by sales that submitted business reports and audit reports by the 25th showed that their total sales amounted to KRW 2,506.0164 trillion. This represents a 1.5% decrease compared to 2022 (KRW 2,543.6015 trillion). The decline in operating profit was even greater. The operating profit of the surveyed companies last year was KRW 104.7081 trillion, down 25.8% from the previous year (KRW 141.2024 trillion).
By company, Samsung Electronics, which was hit hardest by the 'semiconductor cold wave,' saw the largest drop in operating profit. Last year, Samsung Electronics' operating profit was KRW 6.567 trillion, a sharp decline of 84.9% compared to 2022 (KRW 43.3766 trillion). This is the first time in 15 years that Samsung Electronics' annual operating profit fell below KRW 10 trillion since the global financial crisis in 2008, when it was KRW 6.0319 trillion. The cumulative deficit of Samsung Electronics' semiconductor division last year reached KRW 14.8795 trillion.
SK Hynix also showed a notable decline in performance. SK Hynix, which posted an operating profit of KRW 6.8094 trillion in 2022, recorded an operating loss of KRW 7.7303 trillion last year, turning to a deficit on an annual basis.
HMM, which enjoyed a boom during the COVID-19 pandemic, also saw its operating profit plummet by 94.1% last year. In addition, GS Caltex (down 57.7%), SK Energy (down 84.3%), HD Hyundai Oilbank (down 77.9%), S-Oil (down 60.2%), and Korean Air (down 36.8%) each experienced a decrease in operating profit exceeding KRW 1 trillion.
On the other hand, Korea Electric Power Corporation (KEPCO) significantly reduced its operating loss from KRW 32.6552 trillion in 2022 to KRW 4.5416 trillion last year, due to three rounds of electricity rate hikes and a decline in international fuel prices.
Hyundai Motor Company and Kia also saw substantial improvements in their performance. Last year, Hyundai Motor's operating profit increased by 54.0% to KRW 15.1269 trillion. During the same period, Kia's operating profit rose by 60.5% to KRW 11.6079 trillion. Notably, the combined annual operating profit of Hyundai Motor and Kia last year (KRW 26.7348 trillion) exceeded that of Samsung Electronics by more than four times.
By industry, operating profits decreased in 13 out of 18 sectors overall. The decline in the IT electrical and electronics sector, which has led exports, was particularly pronounced.
The IT electrical and electronics sector's operating profit last year was KRW 6.5203 trillion, a sharp drop of 89.0% compared to 2022 (KRW 59.0986 trillion). This is attributed to the global economic slowdown, which worsened sluggish sales of semiconductors, TVs, and home appliances.
The petrochemical sector also saw a significant decrease in operating profit. The operating profit of the petrochemical sector, which reached KRW 23.7755 trillion in 2022, was halved to KRW 11.897 trillion last year. During the same period, the transportation industry fell 65.3% to KRW 5.8873 trillion. Additionally, steel (down 41.6%), construction and building materials (down 15.9%), and pharmaceuticals (down 42.6%) also saw operating profits decrease by more than KRW 1 trillion.
Conversely, public enterprises, which posted a loss of KRW 30.4651 trillion in 2022, reduced their losses significantly to KRW 2.4741 trillion last year. The automotive and parts sector's operating profit last year was KRW 34.2067 trillion, a 55.0% increase compared to 2022 (KRW 22.0718 trillion). Shipbuilding, machinery, and equipment (up 316.3%), distribution (up 5.2%), and telecommunications (up 0.4%) also saw expanded operating profits.
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