South Korea's major corporations, including tech giant Samsung, faced a challenging first half of 2023, reporting significantly weaker performance compared to their US counterparts. The struggles were primarily attributed to sluggish chip and energy sectors, influenced by a global economic slowdown, as revealed in a report on Monday.
Samsung Electronics, a global leader in technology, experienced a substantial decline in sales, operating profit, and net profit, with figures dropping by 21.5 per cent, 95.4 per cent, and 86.9 per cent, respectively, year-on-year.
In contrast, Apple, Samsung's US-based counterpart, saw more modest declines of 4.2 per cent, 10 per cent, and 9.2 per cent in sales, operating profit, and net profit, respectively, according to Yonhap News Agency.
The report by the Federation of Korean Industries (FKI) analyzed the performance of South Korea's top 100 non-financial firms listed on the main local stock exchange during the January-June period. It found that their combined sales inched up by 0.3 per cent year-on-year, reaching $746.3 billion.
In stark contrast, the top 100 non-financial companies listed on the New York Stock Exchange in the US collectively expanded their top-line figures by 2.4 per cent year-on-year, reaching a substantial $3.87 trillion.
The FKI attributed South Korean companies' relatively weaker performance to the global business slowdown, which stemmed from high-interest rates and rising consumer prices. This situation impacted South Korean firms more severely than their US counterparts in terms of earnings.
The combined operating profit of South Korean companies plummeted by 63.4 per cent year-on-year, reaching $24.8 billion during the first half of the year. In contrast, US corporations reported a more modest 3.9 per cent decline, with combined operating profit totalling $638.5 billion.
The net profit of South Korean firms dropped by a significant 68 per cent year-on-year in the first half, while US counterparts managed to increase their bottom line by 3.2 per cent.
The FKI report highlighted that South Korean corporations, particularly those in the information technology and energy sectors, faced substantial challenges during this period. South Korean IT companies, including chip manufacturers, experienced a sharp decline, with total sales, operating income, and net profit decreasing by 21.5 per cent, 113 per cent, and 109.4 per cent year-on-year, respectively, during the first half. In contrast, US IT companies reported milder declines of 0.3 per cent, 4.8 per cent, and 4.4 per cent in the respective categories.
The challenging economic environment, particularly in the chip and energy sectors, appears to have had a more significant impact on South Korean companies, reflecting the complex dynamics of the global market.
Inputs from IANS