The profitability of South Korean listed firms declined last year as they have been struggling to secure revenue amid a protracted economic slump, industry data showed Sunday.
The country’s top 100 firms by asset value posted a combined 867.6 trillion won ($768.6 billion) in sales in 2014, down 2.3 percent from a year earlier, according to the data complied by Chaebul.com, a Seoul-based market research firm.
Their operating profit contracted 15.2 percent on-year to 45.6 trillion won from 53.8 trillion won.
As a result, the operating margin ratio, a profitability ratio that measures how much of a company’s total revenue is made up by operating income, dropped to 5.3 percent last year from 6.1 percent the previous year. It means for every 1,000 won in products a company sells, it receives a mere 53 won after all variable and operating costs have been paid.
The drop in operating margin is attributable to market heavyweights’ weak bottom lines due to downside factors at home and abroad, including a strong local currency, a sharp decrease in crude oil prices and sluggish domestic consumption.
Top market cap Samsung Electronics Co. saw its operating margin drop 3.7 percentage points to 10.1 percent last year, with its operating profit last year tumbling 36.1 percent on-year to 13.9 trillion won.
As runner-up Hyundai Motor Co.’s operating profit edged up 0.4 percentage point to 3.7 trillion won last year, its operating margin slid 0.2 percentage point to 8.7 percent.
Hyundai Heavy Industries Co., the world’s largest shipyard, posted 1.9 trillion won in operating loss last year, with an operating margin of minus 8.2 percent.
Samsung Heavy Industries Co. had a 1.1 percent operating margin ratio with an 84.6 percent plunge in operating profit last year.
S-Oil, the No. 3 oil refinery firm in South Korea, turned to the red last year and saw its operating margin drop to minus 1 percent. (Yonhap)
