Nearly half of South Korea's listed companies saw their operating profit fall on-year in the third quarter, data showed Thursday, as the economic slump weighed down on builders and chemical firms.
Of the 51 companies listed on the country's main stock market that announced their earnings for the July-September period, 23 firms suffered a decline in their net profit from a year earlier, according to the data by FnGuide.
The financial information provider said the weak performances among local listed firms came as the prolonged economic slump dented earnings of those in cyclical industries, which include builders and chemical enterprises.
Cyclical industries refer to sectors which are sensitive to economic cycles. Construction firms, carmakers and brokerage houses are considered to be vulnerable to such fluctuations, in contrast to pharmaceuticals and foodmakers.
Samsung Engineering Co., an industrial plant builder, posted an operating loss of 746.8 billion won (US$704.1 million) over the cited period, and GS Engineering & Construction Corp. also suffered a deficit on falling margins in overseas deals.
Top builder Hyundai Engineering & Construction Co., and Daewoo Engineering & Construction Co. also suffered a 6.2 percent and 8.1 percent on-year decline in the third quarter, following the overall slump in the industry.
"Carmakers such as Hyundai Motor Co. and Kia Motors Corp. also posted weaker-than-expected earnings (in the third quarter)," said Park Ga-young, a researcher at Korea Investment & Securities Co.
"Accordingly, (investors) are revising down the overall outlook of listed firms for the fourth quarter also," Park added.
In contrast, Samsung Electronics Co., the world's top maker of smartphones, saw its third-quarter operating income spike 26 percent on-year, and top chipmaker SK hyinx also moved to profits over the cited period.
South Korea's 12-month earnings per share (EPS) outlook, meanwhile, shed 3.9 percent in October from three months earlier, according to the data by the Institutional Brokers' Estimate System (IBES).
The EPS outlook, which is calculated by dividing a firm's profit by the number of combined shares issued, serves as a barometer of a company's performance down the road. A decline in the figure implies worsening financial conditions.
The IBES also downgraded the annual EPS of U.S.-based firms by
1.2 percent from three months earlier, and those of Chinese and German firms also suffered a 1.3 percent and a 3.1 percent decline, respectively.
Emerging economies experienced a wider decline in EPS outlooks over the cited period, with those of Indonesia falling 6.9 percent and India decreasing 3.9 percent. (Yonhap News)
