Conglomerates were struggling well before virus: FTC

Home > Business > Economy

print dictionary print

Conglomerates were struggling well before virus: FTC

 
Conglomerates in Korea were already struggling to make profit even before the outbreak of the coronavirus pandemic, according to Fair Trade Commission (FTC) data released Sunday.  
 
Net profit of some 64 conglomerates in Korea with more than 5 trillion won ($4 billion) in assets experienced an average of a 48 percent drop last year, falling from 92.5 trillion won to 48 trillion won.  
 
A slump in the semiconductor and petrochemical industries factored in the downtrend.  
 
Samsung Electronics experienced the biggest drop, losing 19.7 trillion won in net profit in 2019 compared to the year before, followed by SK with 14.7 trillion won and LG with 3.5 trillion won.  
 
Their sales also fell by 1.4 percent from 1,422 trillion won last year to 1,401.6 trillion won.  
 
Hyundai Motor, on the back of its successful launch of new models in 2019, gained 3.8 trillion won last year in net profit as well as Doosan with 1.3 trillion won and Posco with 800 billion won.  
 
The FTC categorizes conglomerates with more than 5 trillion won in assets as those who need to regularly report on their affiliates’ business and major internal transactions in order to prevent any unfair trading.  
 
Net profit for these enterprises which recorded 49.5 trillion won in 2015 continued to rise until 2017 where it peaked at 100.2 trillion won. It then fell to 92.5 trillion won in 2018 before tumbling to 48 trillion won last year.  
 
Overall financial health also deteriorated last year.  
 
The ratio of debt to assets rose by 3.9 percentage points last year from 67.8 percent to 71.7 percent. Kumho Asiana Group, one of the companies hardest hit by the recent coronavirus outbreak, saw its debt ratio rise by 364.8 percentage points last year, followed by Kyobo Life Insurance with 46.4 percentage points and KCC with 44.8 percentage points.  
 
Five more companies were added to the list of FTC-designated large business groups.  
 
IMM Investment, a domestic venture capital firm, with assets of 6.3 trillion won became the first private equity firm in Korea to be included in the FTC’s watch list. 
 
HMM, formerly known as Hyundai Merchant Marine, with 6.5 trillion won in assets, Sinkor Merchant Marine with 6.4 trillion won, KG Group with 5.3 trillion won and Samyang with 5.1 trillion won are the latest newcomers to the FTC’s list. 
 
BY JIN EUN-SOO  [jin.eunsoo@joongang.co.kr]
Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
s
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now