South Korea's listed companies suffer 26% drop in operating profit in Q3

South Korea's companies listed on the main stock exchange Kospi in this year's third quarter saw operating profit drop 26% from the same period last year and over 30% from the second quarter this year.

Analysts blame the poor performance on a deteriorating business climate with semiconductors, which drives the Korean economy, seeing nosediving profit and negative external factors persisting such as the 'three highs' of inflation and foreign exchange and interest rates.

The Korea Exchange and Korea Listed Companies Council on Wednesday released the settlement results of listed companies in the third quarter showing a consolidated operating profit of a combined 39.3 trillion won ($29.4 billion). The figure was down 26% from the same quarter last year and 30.3% lower from the second quarter this year.

The operating profit of listed companies in the electrical and electronics sector including Samsung Electronics and SK Hynix plummeted 32.2% to 15.2 trillion won over the cited period. KEPCO's operating losses also jumped from 936.7 billion won to 7.5 billion won.

The operating profit margin of listed companies fell from 9% to 5.4% year on year, and that over this year's first three quarters fell from 8.6% to 7%.

The consolidated operating profit of companies listed on the over-the-counter Kosdaq market rose 1.1% in the third quarter year on year, but declined 9.11% from the second this year.

Experts say prospects for corporate earnings are not looking good in the fourth quarter as well as next year. FnGuide, a domestic corporate database and online information provider, said brokerage projections for the operating profits of 227 listed companies were a combined 36.5 trillion won in the final quarter, down 10.6% from the forecast of 40.8 trillion won released just a month ago and considerably lower than 43.5 trillion won earned in the same quarter last year. 

Hwang Seung-taek, research center head of Hana Securities, said, "Considering the rising cost of capital supply, profits next year are expected to decline 7%-8% from this year's."

Write to Tae-Ung Bae at btu104@hankyung.com