ASIA NEWS NETWORK
WE KNOW ASIA BETTER
Korean conglomerates had tough year, but top groups thrived
Publication Date : 15-05-2014
The performance of Korea’s top 500 companies fell drastically last year, reflecting the slower-than-expected economic growth.
But several top-ranking business groups continued to move forward, signalling a deepening polarisation of wealth.
The downtrend was especially conspicuous in the financial sector, which is currently facing large-scale restructuring after a series of scandals, as well as in the long-struggling shipbuilding, petrochemical and construction sectors.
The nation’s 500 largest companies took in 2.6 quadrillion won (US$2.4 trillion) in combined sales last year, up 1.6 per cent from 2012, according to market research firm CEO Score on Wednesday.
Despite the slight rise in sales, net profit fell by 12 per cent to 86.9 trillion won while operating profit fell by 2.4 per cent to 140 trillion won.
Also, the number of companies making over 1 trillion won in sales, the so-called trillion won club, slipped from 27 to 22, data showed.
The securities industry was the hardest-pressed, as the 19 securities firms included in the research saw an average 67 per cent or 1.1 trillion won fall in their yearly sales last year, compared to the previous year.
The slump was reflected in the fact that Samsung Securities, the stock trading affiliate of Samsung Group, announced an extensive restructuring plan in April and pledged to pare down its executive board by at least 20 per cent.
The energy, banking and petrochemicals sectors followed suit, all with profits decreasing by 30 per cent or more.
But the top five conglomerates continued to thrive.
Only 91 of the top 500 companies were affiliated with Samsung, Hyundai Motor, SK, LG and Lotte, but this cluster monopolised 40.9 per cent of the total sales and 80.3 per cent of the total net profit, according to CEO Score.
Also, the information technology sector, spearheaded by market indicator Samsung Electronics, upped its net profit by 24.8 per cent, from 30 trillion won to 37.6 trillion won.