Due to COVID-19... KOSDAQ Companies' Net Profit in the First Half Slashed to One-Third

Net Profit of 952 KOSDAQ Companies in H1 Hits 3.6 Trillion KRW, Down 28% YoY
Mixed Results by Industry... IT Software & Services Up, Hardware & Telecom and Broadcasting Down

Provided by Korea Exchange

[Asia Economy Reporter Minwoo Lee] The net profit of KOSDAQ companies in the first half of this year has been reduced to one-third. This appears to be due to the economic downturn caused by the novel coronavirus disease (COVID-19). The results varied by sector. While IT software and services and distribution sectors showed significant improvement in performance, the lodging, food, entertainment, and culture sectors underperformed.

According to the Korea Exchange on the 19th, an analysis of the first half consolidated financial results of 952 companies out of 1,059 KOSDAQ-listed companies with December fiscal year-end showed sales of KRW 95.3263 trillion and operating profit of KRW 5.1707 trillion. Sales increased by 1.99% compared to the first half of last year, but operating profit decreased by 9.11%. Net profit was recorded at KRW 3.5979 trillion, down 28.34% during the same period. The debt ratio also increased. As of the end of the first half, the debt ratio was 120.21% (excluding financial industry), up 12.45 percentage points from the end of last year.

Within IT, Software Smiles While Hardware Cries

Specifically, total sales of 351 IT companies increased by 0.48% year-on-year to KRW 32.8149 trillion. Operating profit and net profit were KRW 1.8308 trillion and KRW 1.2331 trillion, respectively, down 16.63% and 26.55%.

Even within the IT sector, fortunes diverged. The IT software and services sector recorded sales of KRW 6.9662 trillion and operating profit of KRW 648.6 billion, up 11.26% and 25.03% respectively from the first half of last year. Net profit also increased by 9.09% to KRW 515.8 billion. On the other hand, IT hardware and telecommunications broadcasting services, also classified under IT, saw decreases in sales, operating profit, and net profit. Operating profit of IT hardware was KRW 928.9 billion, down 32.67% year-on-year. Net profit was halved to KRW 557.8 billion, a 43.27% decrease during the same period.

Distribution and Transportation 'Hold Their Ground'... Manufacturing Halved and 'Saddened'

For non-IT sectors, total sales were KRW 62.5113 trillion and operating profit KRW 2.8689 trillion. Sales increased by 2.8% compared to the first half of last year, but operating profit decreased by 3.56%. Net profit was recorded at KRW 1.3451 trillion, down 29.91% during the same period.

Again, fortunes varied by sector. Agriculture, forestry, and fisheries (22.27%), distribution (22.26%), transportation (18.64%), construction (18.54%), other services (6.93%), and finance (0.56%) sectors saw operating profit increases compared to the same period last year. In contrast, the manufacturing sector's operating profit nearly halved (-47.60%) year-on-year. The lodging, food, entertainment, and culture sectors continued to post losses.

Number of Loss-Making Companies Increases... Generally Recovering in Q2

Provided by Korea Exchange

Overall, the number of loss-making companies increased. Among the 952 companies analyzed, 392 (41.18%) recorded losses. While 108 companies switched from losses to profits compared to the same period last year, 171 companies shifted to losses.

Looking at the second quarter alone, performance showed signs of recovery. Sales were KRW 47.621 trillion and operating profit KRW 1.6979 trillion. Sales decreased by 0.18% compared to the previous quarter, but operating profit increased by 76.80%. Net profit also rose by 22.09% to KRW 1.1609 trillion during the same period.

Meanwhile, 107 companies were excluded from the survey due to reasons such as failure to submit reports, reasons for delisting, foreign companies, changes in fiscal year-end, spin-offs and mergers, missing comparative data, and inappropriate audit or review opinions.

This content was produced with the assistance of AI translation services.