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Samsung, Hyundai dominate corporate profit
Economists cast concern over earnings gap among conglomerates
By Kim Yon-sePublished : Oct. 28, 2013 - 19:35
Samsung Electronics, the flagship unit of Samsung Group, and the two automakers of Hyundai Motor Group make up more than a quarter of the combined net profit of about 460,000 companies in the nation.
According to the Bank of Korea and financial data provider FnGuide, the three firms ― Samsung Electronics, Hyundai Motor and Kia Motors ― collectively logged 24.8 trillion won ($22.5 billion) last year.
The figure takes up 28.6 percent of the total 86.6 trillion won in earnings reaped by 464,425 enterprises.
The proportion of the three firms’ earnings out of the total has continued to increase since the 2008 global financial crisis ― 14 percent in 2009, 16.2 percent in 2010 and 18.9 percent in 2011.
The income disparity between the top three and the rest is seen especially when the figures for 2010 and 2012 are compared.
The combined net profit of the 460,000 firms excluding Samsung, Hyundai and Kia fell 33.9 percent from 93.5 trillion won in 2010 to 61.8 trillion won in 2012. In contrast, the three’s earnings climbed 36.8 percent from 18.1 trillion won to 24.8 trillion won.
Economists say that the Korean economy is critically at risk as it has been heavily dependent upon the two largest conglomerates ― Samsung Group and Hyundai Group.
The situation causes an “optical illusion” under which several leading firms’ noteworthy performance shields the others’ worsening profitability, said commerce and trade professor Kim Sang-jo of Hansung University.
According to data from the Korea Exchange and Chaebul.com, a conglomerate-tracking website, Korea saw the profit gap between Samsung-Hyundai Motor groups and the other major conglomerates seriously widen over the past decade.
This year, the two business groups are estimated generate up about 70 percent of earnings posted by the nation’s 10 largest conglomerates.
Further, of all the companies listed on the main and secondary bourses, subsidiaries of Samsung and Hyundai are estimated to account for more than half of the combined operating profit.
More and more economists say that it is necessary for Korea to “disperse competitiveness” among the other business groups, citing the case that the economy of Finland was led to “falter” due to its flagship Nokia losing ground in the global mobile telecommunications.
By Kim Yon-se (kys@heraldcorp.com)
According to the Bank of Korea and financial data provider FnGuide, the three firms ― Samsung Electronics, Hyundai Motor and Kia Motors ― collectively logged 24.8 trillion won ($22.5 billion) last year.
The figure takes up 28.6 percent of the total 86.6 trillion won in earnings reaped by 464,425 enterprises.
The proportion of the three firms’ earnings out of the total has continued to increase since the 2008 global financial crisis ― 14 percent in 2009, 16.2 percent in 2010 and 18.9 percent in 2011.
The income disparity between the top three and the rest is seen especially when the figures for 2010 and 2012 are compared.
The combined net profit of the 460,000 firms excluding Samsung, Hyundai and Kia fell 33.9 percent from 93.5 trillion won in 2010 to 61.8 trillion won in 2012. In contrast, the three’s earnings climbed 36.8 percent from 18.1 trillion won to 24.8 trillion won.
Economists say that the Korean economy is critically at risk as it has been heavily dependent upon the two largest conglomerates ― Samsung Group and Hyundai Group.
The situation causes an “optical illusion” under which several leading firms’ noteworthy performance shields the others’ worsening profitability, said commerce and trade professor Kim Sang-jo of Hansung University.
According to data from the Korea Exchange and Chaebul.com, a conglomerate-tracking website, Korea saw the profit gap between Samsung-Hyundai Motor groups and the other major conglomerates seriously widen over the past decade.
This year, the two business groups are estimated generate up about 70 percent of earnings posted by the nation’s 10 largest conglomerates.
Further, of all the companies listed on the main and secondary bourses, subsidiaries of Samsung and Hyundai are estimated to account for more than half of the combined operating profit.
More and more economists say that it is necessary for Korea to “disperse competitiveness” among the other business groups, citing the case that the economy of Finland was led to “falter” due to its flagship Nokia losing ground in the global mobile telecommunications.
By Kim Yon-se (kys@heraldcorp.com)
