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Listed firms' Q1 net dips amid rising inflation

Economy 13:48 May 18, 2022

By Chung Joo-won

SEOUL, May 18 (Yonhap) -- South Korean listed firms saw their first-quarter earnings fall from a year ago amid fast-rising inflation despite growths in operating profit and sales, the bourse operator's data showed Wednesday.

The consolidated net profit of 608 companies listed on the benchmark KOSPI totaled 41.69 trillion won (US$32.84 billion) in the January-March period, down 13.79 percent from a year ago, according to the data compiled by the Korea Exchange.

During the cited period, their combined operating profit increased 14.43 percent on-year to 50.51 trillion won, with sales revenue swelling 24.18 percent to 660.91 trillion won.

The on-year decline in the bottom line came as their affiliates performed poorly amid rising inflation and economic uncertainties.

Excluding top cap Samsung Electronics Co., which takes up 11.77 percent of their total sales, the listed firms saw their net profits further drop by a wider margin of 26.33 percent, while operating profits and sales grew 4.69 percent and 24.91 percent, respectively.

Listed firms' Q1 net dips amid rising inflation - 1

Weak business results in the service, auto and construction sectors weighed heavily on their overall performance. Net income in services nose-dived 60.72 percent on-year, with those of auto and construction shrinking 16.41 percent and 15.18 percent, respectively.

The net profit margin, or net profit to total sales, came to 5.21 percent, steeply lower than 8.83 percent a year ago. The ratio of operating gain to revenue stood at 6.24 percent, also down from 7.45 percent a year earlier.

"Corporate margins decreased due to the rising inflation pressure. In a situation like this, expenses grow faster than sales for South Korean firms that are generally dependent on exports of intermediate goods," Mirae Asset Securities researcher Seo Cheol-soo said.

A total of 476 firms, or 78.29 percent, were in the black, down from 504 a year earlier. A total of 132 firms, or 21.71 percent, suffered losses, up from 104 firms a year ago.

Listed firms' Q1 net dips amid rising inflation - 2

Companies listed on the secondary KOSDAQ, on the other hand, performed strong in the first quarter, thanks to robust gains in the IT and medical equipment sectors.

The combined quarterly net income of 1,050 companies, excluding 115 that did not or were not required to submit financial statements, totaled 3.33 trillion won on a consolidated basis, up 2.87 percent from the previous year.

Sales jumped 20.89 percent on-year to 62.77 trillion won over the cited period, with operating profits rising 26.02 percent to 4.28 trillion won.

Their net profit margin decreased 0.93 percentage point on-year to 5.3 percent, while the rate of operating profit to sales grew 0.27 percentage point to 6.82 percent.

A total of 687 firms, or 65.43 percent, were in the black, while 363 firms posted net losses.

jwc@yna.co.kr
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