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Conglomerates' profitability worsens amid low growth

All News 09:34 January 22, 2017

SEOUL, Jan. 22 (Yonhap) -- South Korea's major conglomerates have suffered a setback in their profitability in the past years as their sales dropped amid a protracted economic slump, data showed Sunday.

According to the data compiled by industry tracker Chaebul.com, the combined sales of the country's top 10 conglomerates, excluding state firms, stood at 1,001 trillion won (US$851 billion) in 2015, sliding from 1,071 trillion won in 2014 and 1,070 trillion won in 2013.

In tandem with a slowdown in sales, their operating income also has been on a decline, falling to 54.8 trillion won in 2015 from 49.5 trillion won in 2014 and 61.5 trillion won in 2013, the data showed.

Their operating income to sales ratio, a barometer of profitability, stood at 5.5 percent in 2015, compared with 4.6 percent in 2014 and 5.7 percent in 2013, they showed.

The data showed that Samsung Group, the country's No. 1 business group, saw their sales slow to 271.9 trillion won in 2015, from 302.9 trillion won in 2014 and 318.1 trillion won in 2013, with its operating income ratio also falling to 5.7 percent in 2015 from 6.4 percent in 2014 and 8.9 percent in 2013.

POSCO, the nation's No. 1 steelmaker, also suffered a drop in sales with its revenue sharply falling to 61.7 trillion won in 2015 from 79.7 trillion won in 2011.

Hyundai Heavy Industries, a shipbuilding conglomerate, also saw its revenue slide by 12.1 trillion won to 49.4 trillion won over the cited period, the data showed.

Automaking group Hyundai Motor Group and retail giant Lotte logged a rise in their revenue but suffered a drop in their profitability amid fierce competition with foreign rivals and a slowdown in the global economy, according to the tracker.

Conglomerates' profitability worsens amid low growth - 1


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