South Korean firms see spectacular growth

South Korean firms see spectacular growth

Agence France-Presse, Seoul

The first half profits of South Korean listed firms soared 156
percent to a record high this year despite a sluggish world
economy, authorities said Thursday.

The Korea Stock Exchange (KSE) said 510 listed firms recorded
a combined net profit of 17.44 trillion won (US$13.3 billion) in
the six months to June, including 2.7 trillion won from foreign
exchange gains.

First-half sales rose 0.7 percent from a year earlier to 253.4
trillion won and operating profit rose 10.7 percent to 20.5
trillion won, it said.

Average debt-to-equity ratios dropped to 113.2 percent from
128.99 percent a year earlier, a key indication of stronger
fundamentals in the Korean economy.

The profit surge highlighted the improved financial structure
of South Korean firms after four years' of reforms prompted by
Asia's 1997-1998 financial crisis, the KSE said in a statement.

Stronger domestic demand also played a key role in boosting
revenue, although the companies' performances are seen weakening
in the second half.

Combined second-quarter net profit stood at 7.5 trillion won,
compared to 9.9 trillion won in the first quarter. Operating
profit shrank from 11.1 trillion won to 9.36 trillion won over
the same period.

The net profit of 712 firms listed on South Korea's
technology-heavy Kosdaq market also surged 51.2 percent to a
record 1.53 trillion won in the first half, the KSE said.

Sales of the Kosdaq firms rose 17.3 percent to 29.3 trillion
won, with their first-half operating profit up 21 percent at 2.39
trillion won.

Their second quarter net profit, however, halved to 574
billion won from 1.25 trillion win the first quarter, with
operating profit down 20 percent at 1.06 trillion won.

Major conglomerates led by the country's largest, the Samsung
group, showed remarkable progress in the first half, overcoming a
host of uncertainties such as the won's soaring value, the KSE
said.

The total first-half net profit of Samsung units rose 70
percent to 4.5 trillion won, including 3.8 trillion won recorded
by Samsung Electronics Co., the world's largest memory chip
maker.

The Hyundai Motor group was second with its net profit jumping
39 percent to 1.5 trillion won, followed by the SK group whose
net profit surged to 1.5 trillion won from 645 billion won a year
earlier.

The LG group posted a combined net profit of 277 billion won,
compared to 125 billion won a year earlier.

The results reflect the change of focus by South Korean
companies to profitability from expansion of sales and market
share.

President Kim Dae-Jung, who has struggled to end reckless
expansion by conglomerates, called Thursday for "ceaseless"
corporate restructuring to strengthen competitiveness.