Chaebol’s Cash Reserves Down
By Yoon Ja-young
Staff Reporter
Samsung Group and nine other top conglomerates saw their cash and cash equivalents fall in the first half of June as they increased investment in plants and repaid part of their debts, the Korea Exchange (KRX) said Thursday.
The listed units of the nation's top 10 groups recorded 27.4 trillion won in combined cash and cash equivalents at the end of June, down 1.6 trillion won or 5.4 percent from the end of 2006. Cash equivalents refer to those assets that are easily convertible to cash.
``The top 10 groups' cash reserves fell as they increased purchases of plants and other investment assets. Also, they used their cash to repay part of their debt, contributing to falls in their cash reserves this year,'' said Chung Woon-soo, an official of the KRX.
Listed companies not affiliated with the 10 groups recorded 24.6 trillion won in combined cash reserves, up 7 percent from 22.9 trillion won from December.
Big companies had been reluctant to invest in plants and equipment until last year but are moving to expand their investment this year on growing hopes of recovery in domestic demand and stronger growth in the second half and next year. Still, their capital spending is far from aggressive.
Samsung Group's cash reserves fell 16 percent to 7.8 trillion won at the end of June, while Hyundai Automotive Group saw its cash reserves rise 9.9 percent to 6.9 trillion won.
SK Group units cut their combined cash reserves 16 percent to 2 trillion won, while LG Group's units saw their cash reserves rise 31 percent to 2.3 trillion won.
Shipbuilders expanded their cash reserves sharply on increased profits on rising orders. Hyundai Heavy Industries Group posted the biggest growth rate in cash reserves, up 111 percent to 2.2 trillion won from 1.05 trillion.
By company, Hyundai Motor was sitting on the largest amount of cash reserves that rose 11.7 percent to 4.6 trillion won.
Trailing Hyundai Motor was Samsung Electronics. It was holding 3.3 trillion won of cash reserves at the end of June, down 22 percent from December.
S-Oil was holding 3.1 trillion won in cash reserves, followed by Hyundai Heavy Industries with 2.2 trillion won and Samsung Heavy Industries with 2.2 trillion won.