Korean listed firms unwilling to spend amid uncertainties

South Korean listed firms’ cash-generating capability is expected to increase sharply this year, but they are likely to remain wary of spending big on facility expansion amid high economic uncertainty due to the protracted eurozone debt crisis, data showed Sunday.

According to financial service provider FnGuide, combined free cash flow of 183 listed firms is estimated at 8.37 trillion won ($7.54 billion) for the year, compared with last year’s negative free cash flow of 23.65 trillion won.

Free cash flow refers to cash a business generates after accounting for capital expenditures, such as buildings or equipment, and taxes.

High free cash flow is usually a good sign for a company’s ability to generate cash, but it also means that a company is making small investments.

By company, Samsung Electronics Co., South Korea’s top electronics firm, is expected to register a free cash flow of 10 trillion won this year, a sharp rise from last year’s 1.8 trillion won.

Hyundai Motor Co., the country’s leading automaker, is likely to log a free cash flow of 4.37 trillion won this year, compared with last year’s 2.93 trillion won, followed by its smaller affiliate Kia Motors Corp. with 2.1 trillion won. (Yonhap News)