Large Corporations' Borrowings Due Within One Year Approach 300 Trillion Won

[Asia Economy Reporter Yoo Hyun-seok] It has been revealed that the scale of borrowings (liquidity borrowings) that domestic large corporations must repay within one year is approaching 300 trillion won. As the domestic interest rate hike trend continues, it is expected to become a burden for companies.

On the 22nd, CEO Score, a corporate data research institute, surveyed the borrowing scale as of the first quarter of this year for 273 companies out of 420 manufacturing companies among the top 500 domestic companies. The total borrowings amounted to 840.8481 trillion won. Among them, liquidity borrowings that must be repaid within one year reached 293.6929 trillion won (34.9%).

The borrowing dependency, which indicates the proportion of borrowings to total assets, was 27.1% in the first quarter. This is 0.4 percentage points lower than in 2019, just before COVID-19. Among the 16 industries overall, borrowing dependency decreased in 10 industries including transportation, shipbuilding·machinery·equipment, and daily necessities. On the other hand, it increased in 6 industries including telecommunications, public enterprises, and automobile·parts.

The scale of liquidity borrowings was largest in the automobile·parts industry. In this industry, liquidity borrowings accounted for 34.1% of total borrowings, amounting to 49.186 trillion won. This was followed by public enterprises with 36.7345 trillion won (21.4%), petrochemicals with 35.8715 trillion won (38.1%), and IT electrical and electronics with 34.6188 trillion won (43.2%).

By company, Hyundai Motor's liquidity borrowings were the largest at 33.006 trillion won. This was followed by Korea Electric Power Corporation (KEPCO) with 17.0432 trillion won, Samsung Electronics with 14.7508 trillion won, Korea Gas Corporation with 13.0213 trillion won, and POSCO Holdings with 11.2726 trillion won.

The proportion of liquidity borrowings was over 50% in the daily necessities and shipbuilding·machinery·equipment industries. In the daily necessities industry, liquidity borrowings accounted for 58.7% (8.5325 trillion won) of total borrowings of 14.5446 trillion won, and in the shipbuilding·machinery·equipment industry, 52.6% (14.1186 trillion won) of total borrowings of 26.8617 trillion won had to be repaid within one year.

The telecommunications industry showed the largest increase in borrowing dependency. It rose by 6 percentage points from 25.6% in 2019 to 31.6% in the first quarter of this year. Next, the borrowing dependency of public enterprises increased by 3.4 percentage points from 39.3% to 42.7%, and the automobile·parts industry rose by 3.1 percentage points from 30.9% to 34%.

On the other hand, during the same period, the transportation industry’s borrowing dependency fell sharply by 13.1 percentage points from 53% to 39.9%. The borrowing dependency of the shipbuilding·machinery·equipment industry also decreased by 4.8 percentage points from 27.1% to 22.3%, and the daily necessities industry dropped by 2.7 percentage points from 29.6% to 26.9%.

By company, SK Shieldus showed the largest increase in borrowing dependency. It was 2.3% in 2019 but surged by 61.7 percentage points to 64% in the first quarter. SK Shieldus’s borrowing dependency increased due to the merger with Life & Security Holdings and AD Caps. Next, Hyundai Chemical rose by 27.2 percentage points from 32.2% to 59.4%, and SK Ecoplant increased by 24.2 percentage points from 20.5% to 44.7%.

Conversely, SGC E-Tech Construction’s borrowing dependency dropped sharply by 51.4 percentage points from 53.4% to 2%. This was due to the division of its investment division and merger with SGC Energy, significantly lowering its borrowing dependency. Next, HMM fell by 46.5 percentage points from 73.6% to 27.1%, and SK Chemical (-41.4 percentage points), Simtek (-28.6 percentage points), and Daehan Cable (-26.5 percentage points) also saw large decreases.

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