[Graphics by Song Ji-yoon]
The number of companies with over 1 trillion won ($838.6 million) in annual operating profit are projected to nearly double to 36 in South Korea this year versus 20 last year despite the pandemic crisis, indicating an improvement in Korea Inc.’s business fundamentals.
According to FnGuide on Wednesday, 36 Korean manufacturers are estimated to achieve more than 1 trillion won in operating profit this year. Last year, 20 companies reported over 1 trillion won in operating income.
Among the top five performers, flagship companies of the nation’s top business conglomerates stood out for their fast profit growth except HMM whose profit skyrocketed due to mounting logistics costs.
Samsung Electronics is projected to log an operating profit of 52.64 trillion won this year, up 46.3 percent from a year earlier and nearly doubled from a pre-Covid level in 2019 thanks to a boom in global demand for semiconductors. The country’s second largest memory chip maker SK hynix is estimated to achieve 12.12 trillion won in operating income this year, up a whopping 141.9 percent jump from last year.
Hyundai Motor, which was hard hit by the pandemic two years ago, are estimated to have made nearly three times more profit this year from last year. LG Chem, the chemical and battery unit of LG Group, is expected to reach an operating profit of 6 trillion won this year, driven by strong demand for electronic vehicles. It already overtook the group’s key affiliate LG Electronics whose operating profit is estimated to be 4.64 trillion won.
The outstanding performance of the core units of the country’s top conglomerates have helped their group companies with close ties with their businesses rake in 1 trillion won or more in operating profit this year.
Samsung Electro-Mechanics and Samsung SDI are expected to surpass 1 trillion won in operating income this year thanks to strong orders from Samsung Electronics. Among Hyundai Motor Group affiliates, Hyundai Steel and Hyundai Glovis are on the same trail toward the milestone operating profit. LG Innotek and LG Display are also expected to see their operating profit top 1 trillion won.
The most notable new entrants to the 1 trillion won club are those in petrochemical materials companies. LG Chem and Lotte Chemical are expected to reap big returns from high-value-added synthetic resin and plastic materials, driven by stronger demand in the electronics and healthcare markets.
By Lee Seung-hoon and Minu Kim
[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]