SEOUL, Aug. 19 (Korea Bizwire) — South Korean-listed firms saw their first-half earnings plunge sharply, data showed Monday, due mainly to the sluggish global economy sparked by the U.S.-China trade war.
The combined net profit of 574 listed firms on the main KOSPI bourse in the first six months of the year was tallied at 37.48 trillion won (US$31 billion), down 43 percent from a year earlier, according to data compiled by the Korea Exchange and the Korea Listed Companies Association.
Their sales stood at 988 trillion won, up 0.83 percent from a year ago, while operating profit tumbled 37 percent on-year to 55 trillion won, data showed.
The sales-to-operating profit ratio reached 5.57 percent, down 3.36 percentage points from a year earlier.
Market watchers said the decrease was mainly attributable to the sluggish global economy amid the protracted U.S.-China trade dispute.
In particular, mediocre performances from South Korea’s leading chipmakers prompted the drop.
Samsung Electronics Co. and SK hynix Inc., the country’s top two chipmakers and the two biggest companies in terms of market cap, saw their operating profit sliding 55.6 percent and 88.5 percent, respectively, in the second quarter.
Excluding the two chipmakers, the listed firms’ operating profit and net profit decreased 14.5 percent and 27.8 percent in the first half of the year, data showed.
“With chip prices nearly halved, chipmakers’ poor earnings largely affected the overall earnings,” said Oh Hyun-seok, an analyst at Samsung Securities.
“The sluggish growth of the Chinese economy that prompted South Korea’s exports decline also had a negative impact.”
Their financial status also deteriorated as well, with the average debt-to-equity ratio of the listed companies coming to 110.24 percent as of end-June, up 4.75 percentage points from the end of last year, according to the data.