Major Korean firms fare worse than U.S. counterparts in H1

South Korea's major companies performed far worse than their U.S. counterparts in the first half of 2023 due to the sluggish chip and energy sectors amid a global economic slowdown, a report showed Monday.

South Korea's top 100 nonfinancial firms listed on the main local bourse saw their combined sales edge up 0.3 percent on-year to US$746.3 billion in the January-June period, according to the report by the Federation of Korean Industries (FKI).

In contrast, the combined top line of the 100 leading nonfinancial corporations traded on the New York Stock Exchange expanded 2.4 percent on-year to $3.87 trillion.

A global business slowdown stemming from high interest rates and consumer prices hit South Korean companies harder than their U.S. counterparts in terms of their earnings, said the FKI, the lobby of family-run conglomerates in Asia's fourth-largest economy.

The combined operating profit of the Korean companies tumbled 63.4 percent on-year to $24.8 billion won in the six-month period, while that of the U.S. corporations shrank 3.9 percent to $638.5 billion.

The bottom line of the Korean firms plunged 68 percent on-year in the first half, while that of their U.S. counterparts increased 3.2 percent.

The federation said the performances of large South Korean corporations were affected badly by the worsened records of information technology and energy companies.

The total sales, operating income and net profit of South Korean IT, including chip, firms sank 21.5 percent, 113 percent and 109.4 percent on-year, respectively, in the first half. Yet, the respective figures of the U.S. companies fell 0.3 percent, 4.8 percent and 4.4 percent.

Samsung Electronics Co., South Korea's top-cap firm, saw its sales, operating profit and net profit dip 21.5 percent, 95.4 percent and 86.9 percent on-year, respectively. Comparable figures of its U.S. counterpart, Apple Inc., dropped 4.2 percent, 10 percent and 9.2 percent.

The FKI stressed the need for South Korean big businesses to establish stable profit sources as they remain more vulnerable to external shocks than big U.S. companies.

Source: Yonhap News Agency

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