South Korean companies are forecast to have posted worse-than-expected earnings in the second quarter as they grappled with the Middle East Respiratory Syndrome fallout and an economic slowdown in China, data showed Wednesday.
The combined operating profit for 209 companies listed on the main KOSPI market was estimated at 33.11 trillion won ($29.21 billion) for the April-June period, according to the data compiled by market researcher WiseFn.
The latest figure was 1.5 percent down from the previous month’s average estimate of 33.61 trillion won.
Leading exporters in the shipbuilding, logistics, home appliance and IT hardware segments were estimated to have borne the brunt, the data showed.
Major companies are widely expected to have missed their overseas sales target as China, South Korea’s biggest trading partner, has suffered an economic slowdown and the MERS outbreak has put a damper on domestic consumption.
Samsung Electronics Co., the country’s No. 1 market cap, on Tuesday estimated its operating profit at 6.9 trillion won in the second quarter, down 4.03 percent from a year earlier. The result marked a 15 percent gain from the previous quarter, but it was lower than the consensus among analysts, which was 7.23 trillion won.
“The earnings outlook is not so optimistic when considering the economic slowdown in China and MERS’ negative impact on domestic consumption shares,” said Kim Yong-ku, a researcher at Samsung Securities.
Since the country reported its first MERS case on May 20, 34 people have died from the disease and over 16,500 people have been subject to isolation for possible infection for over a month.
In response to the weak consumer and business sentiment dented by the contagious disease, the finance ministry on Monday submitted an 11.8 trillion-won extra budget bill to shore up the flagging domestic economy.
Last month, the Bank of Korea also trimmed its base rate by a quarter percentage point to a fresh record low of 1.5 percent to prop up growth in Asia’s fourth-largest economy. (Yonhap)
