Firms saw sales rise, operating profit fall in 2018

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Firms saw sales rise, operating profit fall in 2018

Korean companies saw their combined sales rise in 2018, but their operating profit fell on sluggish performances in the electricity, gas and property sectors, government data showed Tuesday.

The combined sales of 708,756 companies reached 4,895 trillion won ($4.11 trillion) last year, up 2.8 percent from a year earlier, according to the data compiled by Statistics Korea.

Their operating profit fell 2.1 percent on year to 284 trillion won in 2018, the data showed.

Big companies with assets worth over 10 trillion won, including Samsung Electronics and Hyundai Motor, accounted for 64.1 percent of the combined operating profit of the Korean businesses last year, underscoring that Korea’s economy is still dominated by conglomerates, known here as chaebol.

In 2018, the country had 2,236 big companies, accounting for a mere 0.3 percent of the total companies, according to the data.

Big firms hired 20.1 percent of all employees and held more than 70 percent of all corporate assets.

The large firms also generated 2,314 trillion won in sales, accounting for 47.3 percent of all corporate sales last year, the data showed.

In stark comparison, the number of smaller companies came to 702,089, or 99.1 percent of all Korean firms, but their combined sales accounted for 37.5 percent of all corporate sales and their combined operating profit made up 22 percent of the total.

Korea has been trying to level the playing field for smaller companies in a country where family-controlled conglomerates have dominated the economy for decades.

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