SEOUL, Dec. 14 (Korea Bizwire) — South Korean companies saw their combined sales inch up in 2019 but their operating profits tumble amid a trade spat between the United States and China, as well as weak demand for semiconductors, government data showed Monday.
The combined sales of 752,675 companies reached 4,987 trillion won (US$4.52 trillion) last year, up 1.9 percent from a year earlier, according to the data compiled by Statistics Korea.
Their operating profit slipped 22.7 percent on-year to 220 trillion won in 2019, the data showed.
Last year’s operating profit marked the sharpest decline since 2011, when Statistics Korea began compiling such data.
Big companies with assets worth over 10 trillion won, including Samsung Electronics Co. and Hyundai Motor Co., accounted for 56.8 percent of the combined operating profit of the South Korean businesses last year, underscoring that South Korea’s economy is still dominated by conglomerates, known here as chaebol.
In 2019, the country had 2,391 big companies, accounting for a mere 0.3 percent of the total companies, according to the data.
Big firms hired 20 percent of all employees and held 70.5 percent of all corporate assets.
The large firms also generated 2,363 trillion won in sales, accounting for 47.4 percent of all corporate sales last year, the data showed.
In stark comparison, the number of smaller companies came to 745,687, or 99.1 percent of all South Korean firms, but their combined sales accounted for 37.4 percent of all corporate sales and their combined operating profit made up 25.5 percent of the total.
South Korea has been trying to level the playing field for small and medium-sized companies in a country where family-controlled conglomerates have dominated the economy for decades.