Listed firms’ profits fall in second quarter

Earnings by Korean listed companies marked on-year growth in the first half of this year, but their second-quarter results tumbled amid unstable external conditions, data showed Thursday.

The combined net profit of 536 out of 632 firms, which are listed on the main Kospi bourse and close their books on Dec. 31, came to 63.4 trillion won ($56.12 billion) on a consolidated basis in the January-June period, up 1.27 percent from a year earlier, according to the data compiled by the bourse operator, Korea Exchange (KRX).

The net for the first half hit an all-time high, surpassing the previous record of 61 trillion won logged in the first half of 2017 by 533 listed companies.

This year, the firms’ operating income also jumped 8.56 percent to 84.96 trillion won, and sales went up 5.33 percent to 924.23 trillion won during the cited period, the data showed.

The debt ratio, the percentage of debts to assets, stood at 106.51 percent as of the end of June, down 1.88 percentage points from the six months before.

Of the 536 Kospi-listed firms whose data is available, 409 entities, or 76.30 percent, were in the black, while 23.70 percent ran a deficit in the first half, according to the KRX.

During the second quarter, however, the companies’ performance was not quite encouraging, the latest data showed.

The listed firms’ operating income inched down 0.66 percent from three months earlier to 42 trillion won, and net profits skidded 6.41 percent to 31 trillion won, though their total sales moved up 2.86 percent on-quarter to 468.6 trillion won.

The rate of operating income to sales, a key gauge of corporate profitability, shed 0.32 percentage points to 8.97 percent, and the corresponding figure for net profit fell 0.65 percentage points to 6.54 percent.

“The second-quarter corporate earnings came below expectations due to growing uncertainties caused by global trade frictions and unstable circumstances in emerging nations, and there are ample signs that such an economic slowdown could continue into the second half,” said Kim Hyeong-ryul, an expert at Kyobo Securities.

Excluding top cap Samsung Electronics, net profit of the listed firms skidded 7.3 percent on-year to 41 trillion won during the first six months of this year, though the total turnover grew 5.12 percent to 805.2 trillion won, and their operating profit inched up 0.2 percent to 53.9 trillion won.

The tech giant reported 22.7 trillion won in profit in the first half, accounting for 35.9 percent of the total, followed by major chipmaker SK Hynix, which reaped 7.4 trillion won in profit to take up 11.8 percent.

As for 844 out of 958 companies listed on the country’s secondary Kosdaq market, combined sales increased 2.65 percent to 83.42 trillion won, and net profits also picked up 5.1 percent to 3.59 trillion won during the first six months of this year.

But their operating profit retreated 11.26 percent to 4.5 trillion won, the findings revealed.

Of the total, 563 firms, or 66.71 percent, enjoyed net profits, while 33.29 percent logged losses, the data showed.

Yonhap