Half of top 30 companies suffer negative growth

Shown above is an overview of SK Innovation's battery plant for electric vehicles in Seosan, South Chungcheong Province. The country's biggest refiner suffered the largest decline in sales among top 30 enterprises during the first nine months of this year. / Yonhap

By Jhoo Dong-chan

Sales of half of Korea's leading corporations fell during the first nine months of this year compared to 2015, according to a domestic consultancy, Sunday.

Chaebul.com said 15 out of top 30 companies suffered a decline in sales volume from January to September year-on-year. Thirteen of these corporations also suffered a fall in operating profit.

Eight companies ― POSCO, SK Innovation, Hyundai Heavy Industries, LG Display, SK hynix, S-Oil, Posco Daewoo and LG Innotek ― suffered a double-digit fall in sales, with SK Innovation leading the way down, with a 21.5 percent plunge.

By contrast, Daewoo Engineering & Construction, Samsung Heavy Industries and GS Retail racked up more than 10 percent growth in turnover.

The nation's shipbuilding industry, which is being restructured, posted a slight improvement in operating profit but other industries such as automotives, electronics, steel and semiconductors showed deteriorated earnings reports.

The nine-month operating incomes of LG Display and SK hynix plummeted 74 percent and 60 percent respectively, while those of LG Electronics and Daelim Industrial surged 62.8 percent and 79 percent apiece.

The top lines of the country's two foremost enterprises, Samsung Electronics and Hyundai Motor, crept up, but they failed to improve their bottom lines.

Samsung had 148.5 trillion won in sales in the first three quarters, up by 0.8 percent year-on-year. But because of the Galaxy Note 7 problem, the company posted 20.2 trillion won operating profit, down 1.2 percent.

Hyundai Motor also showed 2.9 percent sales growth, but suffered a 13.8 percent plunge in operating profit, down to 4.17 trillion won. As a result, the operating income ratio slipped from 7.2 percent to 6 percent.

Experts are worried about the situation

"Samsung Electronics and Hyundai Motor account for around 30 percent of the nation's GDP," said Daishin Securities analyst Lee Sang-hoon.

"In consideration of their subcontractors, their impact on the economy would be bigger.

"Following the global downturn in the shipbuilding and shipping industries, the two firms' performance, which led the nation's economy for many years, is not so good, which is expected to continue through early next year.

"The government and conglomerates should jointly come up with a decisive measure to boost the nation's economy."

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