Foreign-owned companies in Korea send hefty profits back home

South Korean firms wholly owned by foreign companies sent more than 1.1 trillion won ($800 million) back home for the fiscal year of 2021 in aggregate, their public disclosures show, dealing another blow to the weakening won.

Singapore’s sovereign wealth fund GIC led the pack. Its South Korean arm transferred to its headquarters 270 billion won of profits it made through share cancellations on a landmark building in southern Seoul last year.

The amount made up one-fourth of the sum sent home by 16 foreign-owned companies in the country, each of which paid more than 10 billion won in dividends or fees to their shareholders last year.

GIC also was at the front of companies that paid more than their 2021 earnings in dividends to their parent companies. Its Korean arm established for the office building management sent more than seven times its 2021 net profit to its Singapore-based shareholder. 

The total amount transferred by the 16 companies to foreign-based shareholders slightly exceeded their combined net profit of 1 trillion won, the data shows.

GIC acquired the Gangnam Finance Center, a skyscraper in the posh area of the Gangnam business district in Seoul, from the US investment firm Lone Star in 2004. It has already retrieved most of its 930 billion won investment in the 45-story building through dividend and share retirement.

The officially assessed value of the Grade A building stands at 2.3 trillion won as of March.

Foreign-owned companies that sent hefty profits home for the fiscal year of 2021
GIC	270 billion won
Ralph Lauren Korea	102.2 billion won
Dong Woo Fine-Chem	107.5 billion won
Merrill Lynch Securities	85 billion won
Macquarie Finance	80 billion won
Toyota Korea	79.6 billion won
Tokyo Electron Korea	70 billion won
Korea Murata Electronics	60 billion won
Richemont Korea	47.6 billion won
UBS Securities	42 billion won
Burberry Korea	30 billion won
TongSuh Petrochemical	30 billion won
Olympus Korea	27.6 billion won
Patagonia Korea*	17.3 billion won (fees)
Nintendo of Korea	15.5 billion won
Mitsui & Co. Korea	11.3 billion won
Note: *Patagonia Korea's sent the money in the form of fees to the parent company.
Source: Public disclosures to the Financial Supervisory Service

Ralph Lauren’s Korean unit, a US brand well-known for its trademark Polo shirts, sent 120.2 billion won in dividends home, in addition to the money derived from its stock cancellation.

Dong Woo Fine-Chem Co., wholly owned by Sumitomo Chemical Co., paid 107.5 billion in dividends to its Japanese shareholder.

Korean companies that transferred more than 2021 net profit to foreign parent firms
Gangnam Finance Center	678.4%
Macquarie Finance	666.7%
Mitsui & Co. Korea	313.9%
Toyota Korea	278.3%
Merrill Lynch Securities	180.5%
Burberry Korea	170.5%
Nintendo of Korea	116.5%
Olympus Korea	100%
Source: Public disclosures to the Financial Supervisory Service

Their hefty dividend payments to overseas head offices should dent the balance of South Korea’s current account surplus, which has been shriveling due to rising import prices, and could pull the won even further lower.

The Korean currency has been at its lowest level per the dollar in nearly 13 and a half years, hovering in the range of 1,370-1,375 in Tuesday trade.

Write to Ik-Hwan Kim at lovepen@hankyung.com
Yeonhee Kim edited this article.