May 17, 2023
SEOUL – Major companies in South Korea witnessed their operating profit nearly halve on-year in the first quarter this year, as the country’s key semiconductor industry struggles from its worst downturn, a corporate tracker said Tuesday.
According to corporate data research institute CEO Score, the combined operating profits of 309 of the top 500 Korean companies by sales marked 25.8 trillion won ($19.3 billion) in the January-March period this year – a plunge by 48.8 percent from 50.5 trillion won in the first quarter last year.
CEO Score said the figure recorded a decline for a third consecutive quarter. The combined operating income in the third quarter last year declined 11.4 percent on-year, and 69.1 percent in the fourth quarter.
Combined sales, on the other hand, edged up 6.8 percent to record 700.7 trillion won in the first quarter of this year.
For the severe drop in the combined operating income, the corporate tracker attributed to the poor performance of Samsung Electronics and SK hynix, the world’s No. 1 and No. 2 memory chip makers, respectively.
As the global chip market is suffering from serious slump in demand and falling prices, Samsung saw its worst quarterly operating profit in 14 years in the first three months of this year. It posted 640.2 billion won, dipping 96.6 percent on-year, as its sales fell 18.1 percent to 63.75 trillion won.
SK hynix also suffered a record loss of 3.4 trillion won in the first quarter of the year, falling into the red for a second consecutive quarter.
Drops in other industries also contributed to the fall in the combined operating profit. Operating profit of 11 out of 19 industries decreased, according to the corporate tracker.
Information technology and electronics fell in to the red, logging an operating loss of 794.1 billion won in the first quarter this year. The industry had reported 20.9 trillion won in operating profit in the first quarter last year.
Petrochemicals witnessed the second largest drop of 41.4 percent to record an operating loss of 3.4 trillion won, as the logistics, pharmaceuticals and steel industries also landed in the red.
On the other hand, cars and automotive parts saw operating profits jump 81.6 percent on-year to record 7.96 trillion won.