Major Conglomerates' Q3 Operating Profit 40 Trillion Won... 70% Increase from Previous Quarter

CEO Score, Q3 Performance Analysis of Korea's Top 500 Companies
Public Enterprises and IT Electrical Electronics Turned Profitable Compared to Previous Quarter
Petrochemicals Also Increased Due to Oil Price Rise
Entering a Phase of Performance Growth

Operating profits of major domestic companies nearly reached 40 trillion won in the third quarter of this year, surging more than 70% compared to the previous quarter.

On the 15th, CEO Score, a corporate data research institute, announced that it analyzed the third-quarter performance of 304 companies among the top 500 domestic companies by sales that submitted quarterly reports by the 14th. The operating profit of major domestic conglomerates in the third quarter was 39.7201 trillion won, a 70.1% increase from the previous quarter (23.3449 trillion won). This represents a 4.8% increase compared to the same period last year (37.9166 trillion won), marking the highest record in the last five quarters.

During the same period, the total sales of major conglomerates also increased by 2.5% from 666.2323 trillion won in the previous quarter to 683.2041 trillion won.

Quarterly Performance Trends of Top 500 Companies. [Provided by CEO Score]

The operating profit of major domestic conglomerates peaked at 52.3842 trillion won in the second quarter of last year, then sharply declined to 37.9166 trillion won in the third quarter and 11.2477 trillion won in the fourth quarter of the same year. Since then, it showed a gradual recovery with 25.0205 trillion won in the first quarter and 23.3449 trillion won in the second quarter of this year, before surging in the second half.

By industry, public enterprises showed the largest increase in operating profit. Public enterprises recorded an operating loss of 3.4728 trillion won in the second quarter but turned to an operating profit of 4.8381 trillion won in the third quarter. This improvement is attributed to the significant performance enhancement of Korea Electric Power Corporation (KEPCO), Korea Hydro & Nuclear Power, and the five power generation companies due to electricity rate hikes and increased summer electricity sales.

The petrochemical sector also experienced a strong positive effect from rising oil prices. The operating profit of petrochemical companies surged 423.3%, from 1.1491 trillion won in the second quarter to 6.013 trillion won in the third quarter.

The IT, electrical, and electronics sector, which suffered large deficits due to the "semiconductor cold wave" in the first half, turned to an operating profit of 3.0254 trillion won in the third quarter. Construction and building materials (up 32.9%), services (up 20.0%), food and beverages (up 26.8%), distribution (up 56.1%), and pharmaceuticals (up 40.2%) also saw significant increases in operating profit.

On the other hand, the automotive and parts, shipbuilding, machinery, and equipment sectors experienced a decline in operating profit compared to the previous quarter. The sector with the largest decrease was automotive and parts (8.7688 trillion won), down 10.0% from 9.7415 trillion won in the previous quarter. The automotive sector's slight decrease in operating profit is believed to be due to a base effect from improved business conditions and strong performance in the previous quarter.

Operating profits also declined in shipbuilding, machinery, and equipment (down 16.1%), telecommunications (down 19.1%), steel (down 25.1%), securities (down 8.9%), household goods (down 14.0%), energy (down 19.4%), trading companies (down 16.7%), credit finance (down 4.9%), and transportation (down 1.2%).

By company, KEPCO showed the largest increase in operating profit compared to the previous quarter. KEPCO recorded an operating loss of 2.2724 trillion won in the second quarter but turned to an operating profit of 1.9966 trillion won in the third quarter. Samsung Electronics also saw a significant increase in operating profit. Samsung Electronics’ third-quarter operating profit was 2.4335 trillion won, a 264.0% increase from 668.5 billion won in the previous quarter. Korea Hydro & Nuclear Power, GS Caltex, SK Hynix, SK Energy, and S-Oil also showed significant improvements in profitability.

In particular, Samsung Electronics and SK Hynix, which had large deficits in the first half due to weakening memory semiconductor demand and falling DRAM prices, showed rapid performance improvement as semiconductor prices recovered in the second half.

The company with the largest decrease in operating profit compared to the second quarter was Kia. Kia’s third-quarter operating profit was 2.8651 trillion won, down 15.8% from 3.403 trillion won in the previous quarter. This was followed by Hyundai Motor (down 9.8%), KT (down 44.1%), Hyundai Steel (down 50.9%), and Samsung Engineering (down 55.5%). However, despite the decrease in operating profit compared to the previous quarter, both Kia and Hyundai Motor achieved record-high cumulative operating profits for the third quarter this year compared to the same period last year.

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