Korean companies slumping in o`seas resource development

Large companies in Korea have ventured into overseas resource development en masse over the past four years, but most of them have suffered losses, a survey released Thursday said.

According to a study of Korea’s top 30 companies in assets conducted by chaebol.com, the number of corporate bodies specializing in overseas resources development was 78 in late September last year, up from 50 at the end of 2008.

By conglomerate, LG Group saw the largest increase from 13 in 2008 to 19 last year, followed by STX from four to nine. The figure for Youngpoong Group grew from one to five, that for Samsung Group from eight to 11, and Tongyang Group established two companies. SK Group, whose main business is energy, more than doubled the number of such companies from 14 in 2008 to 29 in 2009. After selling three oil fields in Brazil last year, the figure fell to 14, however.

Among the 78 businesses, just 22, or 28.2 percent, have posted a surplus. The remaining companies gained no profits or suffered deficits. Among seven Hanwha Group affiliates, only one posted net profit and four earned none. Of five Youngpoong companies, just one posted a surplus, and both of Tongyang’s natural gas developers posted losses.

Just three of Samsung’s 11 affiliates, one of GS` four subsidiaries, two of nine STX affiliates, and three of 14 SK companies finished in the black.

By contrast, LG and LS performed well. Eight of LG’s 19 affiliates and LS two affiliates reaped net profits.

yunjung@donga.com