The bottom line of companies publicly trading on the main Kospi bourse shriveled nearly 40 percent on year in the first quarter to reflect the losses of chip heavyweights and overall fall in Korean exports amid prolonged trade tensions between the United States and China.
According to data released by Korea Exchange and Korea Listed Companies Association on Friday, the combined operating profit of 573 Kospi-listed companies with a fiscal year ending December reached 27.8 trillion won ($23.3 billion) on a consolidated basis in the January-March period, down 36.88 percent from a year ago. Their combined net profit plunged 38.75 percent on year to 20.9 trillion won, while sales inched up 0.16 percent to 484.3 trillion won during the period.
Their average operating margin in the first three months lost 3.37 percentage points to 5.74 percent, with net margin down 2.74 percentage points at 4.31 percent during the same period.
Korean exports suffered from cyclical downturn in chip sector and slowed demand from China, the country’s largest export destination, amid escalating import barriers from the U.S. Exports slumped 8.5 percent on year to $132.7 billion in the first quarter ended March, according to Korea International Trade Association and Ministry of Trade, Industry and Energy. Computer shipments shrank 33.7 percent, wireless communications devices 27.1 percent, and semiconductors 21.4 percent.
When excluding chip-making Samsung Electronics and SK Hynix, combined operating profit fell 15.96 percent on year to 20.2 trillion won in the first quarter. Combined net profit also slid 23.55 percent to 14.7 trillion won, while combined sales added 2.64 percent to 425.2 trillion won.
Companies listed on the bio and tech-heavy Kosdaq bourse fared better than the Kospi members. The combined operating profit of 910 Kosdaq-listed firms with a fiscal year ending December gained 3.42 percent on year to 2.1 trillion won on a consolidated basis for the first three months. Their combined net income dropped 7.8 percent to 1.6 trillion won, while combined sales added 7.38 percent to 43.1 trillion won.
Their operating margin slipped 0.19 percentage point to 4.93 percent, and net margin also 0.63 percentage point down to 3.82 percent. Average debt ratio improved 8.36 percentage points to 110.99 percent as of the end of first quarter, with 589 out of 910 companies seeing a profit in the net balance. The remaining 321 firms logged a net loss during the period, data showed.
By Moon Il-ho and Lee Ha-yeon
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