Korean oil refining, cars, electronics see banner year in 2011

Korean conglomerates did relatively well last year amid the global economic slump. Oil refining and cars posted record performances despite high oil prices, whereas shipping and shipbuilding suffered due to a deteriorating business environment.

According to a general tally of major conglomerates` business performance last year released Saturday, the refinery industry had to lower oil supply price 100 won (9 cents) per liter due to government pressure in the second quarter, but performance significantly improved due to profit gains from refinery and sales grew in petrochemicals.

SK Innovation saw sales grow 27 percent to 68.3 trillion won (61 billion U.S. dollars) and operating profit jump 51 percent to 2.85 trillion won (2.54 billion dollars).

The Korean car industry enjoyed a significant boost in performance due to robust exports. The sector also benefited from notable business gains due to production disruptions faced by Japanese carmakers in the wake of the massive earthquake in Japan in March last year.

Hyundai Motor posted 8.08 trillion won (7.22 billion dollars) in operating profit on 77.80 trillion won (69.5 billion dollars) in sales, all record highs for the company. Kia Motors posted 3.53 trillion won (3.15 billion dollars) in operating profit, up 20.6 percent, on 43.19 trillion won (38.6 billion dollars) in sales, up 41.6 percent.

The global electronics industry had a tough year due to natural disasters, including the earthquake in Japan, floods in Thailand, and the plunging prices of LCD displays and semiconductors. Korean companies such as Samsung Electronics and LG Electronics, however, displayed fairly good records by making a splash in the smartphone and high-end TV markets.

Samsung, which topped global smartphone sales by beating Apple, posted 16.25 trillion won (14.5 billion dollars) in operating profit on 165 trillion won (148 billion dollars) in sales last year. LG saw sales decline about 3 percent last year, but operating profit rose 58.9 percent. Its mobile handset operation turned to the black for the first time in seven quarters, while its 3-D TV business made strides.

In contrast, the airline, shipping and shipbuilding industries took the brunt of deteriorating business environment, including slumps in advanced economies and high oil prices. Korean Air`s sales were up 5.4 percent year-on-year due to the growing number of foreign tourists to Korea, but operating profit plunged 62.8 percent due to high oil prices and other factors.

Hanjin Shipping incurred operating losses of 492.6 billion won (441 million dollars) last year. Shipbuilding suffered from falling orders from ship owners in Europe and a slump in the shipping sector. Hyundai Heavy Industries posted 2.61 trillion won (2.33 billion dollars) in operating profit last year, down 26.7 percent from 2010.

parky@donga.com gene@donga.com