Samsung, Hyundai take up half of top 30 firms’ income

Korea has seen a growing gap between a few leading performers and the rest of the pack amid the prolonged global economic slump. Samsung Electronics, Hyundai Motor and Kia Motors are projected to account for over half of net profits generated this year by the country’s top 30 listed firms according to analysts Tuesday.

They say the three firms have achieved remarkable performances on the back of strengthened global competitiveness, but warn that Korea needs to cut its increasing dependence on information technology, automobiles and a few other sectors for growth, stressing it should nurture more top global players across its industries.

According to online stock information provider FN Guide, Korea’s 30 largest companies listed on the local bourse will earn a combined 67.5 trillion won ($60.8 billion) in net profits in 2012.

Samsung Electronics, Hyundai Motor and Kia Motors are expected to generate combined net earnings of 36.7 trillion won, accounting for 55 percent of the total.

The world’s largest smartphone manufacturer is projected to make a 22.7 trillion won net profit this year, equivalent to 34 percent of the total, while the nation’s first- and second-biggest carmakers will likely see net earnings of 9.6 trillion and 4.5 trillion won, respectively.

The three companies are also forecast to account for nearly half of operating earnings generated by the top 30 listed firms.

FN Guide forecast the 30 will earn a combined 83.4 trillion won in operating profits this year; the top three are expected to make 41.3 trillion won, accounting for 49.5 percent of the total.

The performance gap between the latter and the rest of the group has widened over the past few years. In 2011, the trio accounted for 44 percent of the combined 57.3 trillion won in net income among the top 30. They were also responsible for 38 percent of all operating earnings.

“When the economy goes bad, small- and medium-sized businesses are hit hardest. In contrast, Samsung and other large businesses are in a much better position to cope with business downturns on the back of dominant market positions, huge cash reserves and technological prowess among other factors,’’ said Kim Yoon-gi, a chief economist at Daishin Securities.

Kim said the country’s top electronics and car firms have achieved outstanding performances, despite the international economic slump, projecting they will continue to expand their reach across the globe.

“But at the same time, Korea should create more top-notch international players in a wide range of industrial fields to effectively weather increasingly uncertain business conditions at home and abroad,’’ the economist said.

The government should invest more to nurture small but competitive manufacturers in the parts and materials sectors, he said. “Businesses themselves need to double their efforts to develop new technologies, explore overseas markets and secure skilled manpower.’’ <The Korea Times/Lee Hyo-sik>

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