First-Quarter, Net Profit of Listed Companies Fell by 62 %

The domestic companies showed sluggish business performances for the first quarter of this year, due to the worsened economy and the steep rise of money exchange rate.

The sales of the listed and registered firms increased about 7 percent over the first quarter of last year, but the net profits dropped respectively by 62 percent and 87 percent. Especially, four out of ten conglomerates have been in the red. Among the conglomerates posted a surplus, five groups except Hyundai Motor saw their decrease of net profit. And the debt ratio rose by average of 10 percent, showing the vulnerability of the financial structure.

According to the data released by the Korea Stock Exchange (KSE), first-quarter net profits of the 551 listed companies closing their books in December, was 3 trillion 571.7 billion won, plunged by 61.7 percent over the same period of last year (9 trillion 332,7 billion won). The gross profit plummeted 39 percent to 5 trillion 473,7 billion won. And the total sales yielded 140 trillion 548,6 billion won, increased by 7.5 percent, and the operating profit yielded 11 trillion 353,3 billion won, increased by 0.6 percent.

KSE explained that the domestic companies had to face the plunge of net profit thanks to the worsened economic situation such as a fall in the price of a semiconductor, a large scale loss from the stock evaluation due to the depressed stock market, and a loss from the difference of money exchange rate.

Among top-10 conglomerates, Hyundai Motor posted the 21.9 percent increase of net profit, but Hyundai, Kumho, Hanwha saw their decreases of net profit. Especially Hanjin recorded red figures for two consecutive years. And Samsung (-20.8 percent), LG (-36.8 percent), SK (-16.0 percent), POSCO (-87.0 percent), Lotte (-33.0 percent) recorded sharp decline of net profit.

The debt ratio of the total listed companies was average of 175.1 percent, an increase of 12.7 percent over the same period of last year (162.4 percent).

Meanwhile, among the companies registered in KOSDAQ, 327 companies, excluding financial service sector, increased their sales to 6 trillion 300 billion won (the increase of 10 percent), but the gross profit and net profit were respectively 121,1 billion won and 33,9 billion won, dropped by 63 percent and 92 percent.

For the total companies of KOSDAQ, the net profit ratio was 2 percent, dropped by 5 percent from the same period of last year (7 percent). If the newly registered items (7 percent) were excluded, the net profit ratio was no more than 1 percent.

Lee Cheol-Yong lcy@donga.com