Business groups' investments dip on earnings shocks

By Lee Kyung-min

• Published Nov 17, 2019 5:12 PM KST
• Updated Nov 17, 2019 5:51 PM KST

By Lee Kyung-min

The combined investments by Korea's major business groups dropped 17 percent in the first three quarters of the year due to a plunge in earnings amid the economic downturn, data showed Sunday.

According to corporate tracker CEO Score, 272 subsidiaries of 29 business groups invested a combined 54.3 trillion won (46.6 billion) in the January to September period, down 10.8 trillion won, or 16.6 percent, from 65.1 trillion won last year.

The setback followed a sharp reduction in corporate investment from

the nation's top semiconductor and display manufacturers that long accounted for hefty facility and construction investments over over the past few years.

Samsung Electronics slashed investments by 29.1 percent, or 5.3 trillion won, from the year before, the steepest reduction among the top local firms. SK Hynix cut its spending by 3.2 trillion won, or 30.1 percent, while LG Display reduced corporate investment by over 2.5 trillion won, down 52.4 percent.

Measured year-on-year, however, Samsung Group's overall investment plummeted 29 percent, followed by SK Group, the holding company of SK hynix (19 percent) and LG Group, the holding company of LG Display (22 percent).

Despite the overall decline in corporate investment, 16 groups expanded their spending between January and September.

Among the business groups that increased investment, KT, Korea's second-largest mobile carrier by market capitalization, invested 644 billion won more than the year before, mostly into 5G technologies.

This is followed by GS (377 billion won), Hanwha (239 billion won) and POSCO (233 billion won).