Exporters Smile At Won's Slide Against Dollar

Korea's export-oriented companies are expected to benefit from the recent weakening of the won against the U.S. dollar. Samsung Electronics Co. put the value of the local currency at 1,050 won against the dollar early this year when the firm drew up its strategy for the year.

If the won stays at the current level of around 1,300 won against the greenback for the rest of this year, the company says it will reap more than 600 billion won ($463 million) in extra profit. Exports account for 65 percent of Samsung Electronics' total yearly sales.

Humax, a manufacturer and exporter of set-top boxes for satellite television, also estimated the won-dollar exchange rate at 1,050 won.

Thanks to the won's steep decline, the company saw its sales jump by 140 percent to 34.6 billion won, with its pretax profit soaring 170 percent to 13.2 billion won.

Local brokerage houses forecast that petrochemical, textile and shipbuilding industries will benefit the most from the won's slide, expecting a 1-percent drop in the value of the won to lead to a gain of over 5 percent in profits.

Samsung Securities Co. picked Kolon International Corp. as the biggest beneficiary of a weaker won. The brokerage firm estimated that the trading company's profit will rise by 6.8 percent for every 1 percent of value shed by the won.

Other exporters, including Hyundai Heavy Industries Co., Oriental Chemical Co. and SK Chemicals, will see their profits grow more than 4 percent for every 1-percent drop in the won's value.

ioExport-oriented businesses are reaping windfall gains from a strengthening dollar,lr said Lee Seung-woo, a senior researcher at the securities company. "But such an effect is offset by a weakening yen, because key local firms in electronics, chemical and shipbuilding businesses are competing with Japanese rivals," Mr. Lee said.

by Chung Jae-hong