South Korea profit decline hits over half midsized firms

Seoul : A majority of midsized firms reported declines in operating profit in the first half of the year amid economic uncertainties, industry data showed on Wednesday.

According to the data from corporate tracker CEO Score, 500 listed midsized firms posted a combined operating profit of 6.34 trillion won ($4.55 billion) in the January-June period, down 4.1 percent from 6.62 trillion won a year ago.

Sales, however, climbed 3.1 percent on-year to 122.6 trillion won during the same period, reports Yonhap news agency.

Out of the 500 firms, 269, or 53.8 percent, saw operating profit fall, while 60 firms, or 12 percent, remained in the red.

The information technology (IT) and electronics sector suffered the steepest decline, with combined operating profit dropping 25 percent to 1 trillion won from 1.35 trillion won a year earlier.

The construction sector also struggled, as its combined operating profit plunged 42.5 percent, or 222.3 billion won, from a year ago.

In contrast, the service sector recorded the strongest growth, with operating profit soaring 30.7 percent on-year to 1.04 trillion won from 797.7 billion won.

“The IT and electronics sector was hit hard by sluggish demand driven by U.S. tariffs,” said an official from CEO Score, adding that a prolonged economic slump weighed heavily on midsized firms’ bottom lines.

Meanwhile, major South Korean companies, excluding chip giant SK hynix Inc., saw their operating profit decline 1.7 percent in the first half of the year from a year earlier amid lingering economic uncertainties, industry data showed.

According to the data from corporate tracker CEO Score, 342 of the country’s top 500 companies by sales that released their half-yearly reports posted a combined 1,655.3 trillion won in sales for the January-June period, up 5.5 percent from a year earlier.

Their aggregated operating profit rose 5.9 percent on-year to 118.5 trillion won.

However, when excluding SK hynix, which reported the largest operating profit of 16.7 trillion won for the period, their combined operating income fell 1.7 percent from a year earlier.

Tech giant Samsung Electronics placed second with an operating profit of 11.4 trillion won for the first half, down 33.4 percent from a year earlier.

Hyundai Motor Co. logged 7.2 trillion won in operating profit, followed by Korea Electric Power Corp. with 5.9 trillion won and Kia Corp. with 5.8 trillion won.