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Sat, Apr 04, 2009 - Page 10 News List

Big South Korean firms see large drop in profits

AFP , SEOUL

South Korea’s largest publicly owned companies suffered a combined drop of more than 90 percent in profits last year because of the economic downturn and rising oil prices early in the year, data showed yesterday.

The combined net profit of the 24 leading firms nosedived 93.6 percent from a year earlier to 331 billion won (US$245 million) last year, the Ministry of Strategy and Finance said.

It was their worst performance since the government began compiling data on public firms in 2003.

“This is probably due to the global economic recession and financial market instability in 2008,” the ministry said in a statement.

The fall was largely blamed on the poor performance of power monopoly Korea Electric Power Corp, which was hit hard by high oil prices, it said.

The firm suffered a net loss of 2.9 trillion won last year compared to a profit of 1.5 trillion won a year earlier.

However, the companies saw sales rising 22.5 percent year-on-year to 95.2 trillion won last year, the ministry said.

Their assets stood at 309.8 trillion won at the end of last year, up 15.8 percent from a year earlier, but total debt grew 28 percent to 177.1 trillion won.

South Korean companies were hit hard in the first half of last year by soaring oil prices which touched records above 147 in July before plummeting in the second half due to the global financial crisis.

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