Profits of South Korea’s listed companies halved in 2019 on year due to trade fallout from the faceoff between United States and China, stoking questions about their resilience to a bigger challenge from the virus pandemic.

The combined operating profit of 583 companies listed on the benchmark Kospi market with fiscal year ended Dec. 31, 2019 fell 37.04 percent on year to 102 trillion won ($82.3 billion), according to compiled data released by the stock exchange operator Korea Exchange on Wednesday. Their net profit stopped at 52 trillion won, plunging 52.82 percent from a year ago period while revenue inched up 0.47 percent to 2,006 trillion won.

The compiled data includes only the results from 583 companies out of total 652 Kospi-listed firms that reported a consolidated financial statement, excluding new entrants, spinoffs, mergers, and those without acceptable audit reports. The business results from 41 financial companies were also left out due to reporting differences.

Market analysts attributed their losses to the prolonged trade dispute between the U.S. and China last year. Strong performance in 2018 due to best-ever reports by memory chip makers also made their fiscal report 2019 look bad.

In 2019, nearly 30 percent, or 167 out of 583 Kospi-listed companies incurred net loss based on a consolidated basis.

The report card looked worse when excluding heavyweight Samsung Electronics Co., whose revenue accounted for 11.48 percent of the Kospi firms’ combined sales last year. The combined net income of Kospi companies excluding Samsung Electronics sank 54.04 percent and operating profit 28.02 percent in 2019 compared to a year earlier, although revenue gained 1.30 percent on year.

By industry, six sectors including textile and apparel makers reported a gain in net profit last year while nine including electronics suffered a fall. Shipping and warehouse service sectors as well as gas/electricity extended losses.

The poor earnings also led to a rise in debt ratio at Kospi companies. Their combine debt ratio reached 111.86 percent, as of the end of December last year, up 7.34 percentage points from a year earlier.

Companies in the junior Kosdaq market also did poorly.

In 2019, nearly 40 percent, or 349 companies out of 946 Kosdaq-listed firms reported loss.

The combined net profit of the Kosdaq firms tumbled 10.47 percent on year on a consolidated basis. Their operating income, however, rose 4.63 percent on year and revenue was up 8.39 percent.

Debt ratio came to 107.29 percent, up 6.49 percentage points from a year earlier.

The 946 Kosdaq companies include only Korean firms with fiscal year ended in December 2019 and with acceptable audit reports. The total also excludes those spun off or merged last year.

By Kim Gyu-sik and Cho Jeehyun

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]