The buildings of South Korea’s major firms in Seoul. (Yonhap)
SEOUL, Nov. 25 (Korea Bizwire) — Large companies in South Korea sharply increased their cash reserves over the past year amid increased uncertainty due to the coronavirus pandemic, a corporate tracker said Wednesday.
The cumulative free cash flow of 259 listed firms came to 28.1 trillion won (US$25.3 billion) as of the end of September, up 163 percent from a year earlier, according to CEO Score.
Free cash flow refers to cash a business generates after accounting for capital expenditures and taxes. Free cash flow indicates a company’s ability to pay out dividends.
Of the total, 55.2 percent, or 143 firms, saw their free cash flow increase over the cited period, with chip behemoth SK hynix Inc. posting the largest gain of 7.4 trillion won. Last year, SK hynix’s free cash flow came to minus 4.9 trillion won.
As of end-September, Samsung Electronics Co., the world’s top smartphone and memory chipmaker, had the largest free cash flow of 4.3 trillion won, trailed by leading chemicals maker LG Chem Ltd. with 3.3 trillion won and state power utility Korea Electric Power Corp. with 2.7 trillion won.
CEO Score said those large companies probably increased their surplus cash in the third quarter as the prolonged coronavirus crisis increased business uncertainty.
(Yonhap)
