Korea’s major companies’ Q2 overseas sales drop 20% due to pandemic

South Korea’s top 100 companies saw their overseas sales shrink by a fifth in the second quarter from the year-earlier period, weighed by the fallout of the COVID-19 pandemic.

According to the Federation of Korean Industries (FKI) on September 7, the country’s biggest 100 companies in terms of sales reported a combined 146.3 trillion won ($123.2 billion) in overseas revenue in the April-June quarter, down 19.8% on year.

Hit hardest was the steel industry, whose overseas sales fell 80.1% due to a plunge in demand for automotive steel sheets.

Automobile and auto-parts makers suffered a 36.5% revenue drop as global carmakers such as Volkswagen, BMW and Audi suspended some of their production lines. Energy and chemicals companies saw their international sales dwindle 30.9% on weaker refining margins and falling crude oil prices.

The electronics and home appliances sector’s overseas revenue fell 5.1%, despite growth in remote work and schooling amid the widespread non-contact business culture.

By region, sales in Asia fell the most at 24%, followed by the Americas (12.6%) and Europe (11.2%). The figures are based on data from the top 20 companies that provide a regional breakdown.

CHINA OFFERS SILVER LINING

China was the single bright spot for local companies.

Combined Chinese sales of the five big companies -- Samsung Electronics Co., Hyundai Motor Co., LG Electronics Inc., SK Hynix Inc. and Hyundai Mobis Co.— rose 5.9% in the second quarter on year and 19.6% from the previous quarter.

The sales gains were driven by the rapid rebound of the Chinese economy from its March bottom and the country’s enhanced investment in infrastructure, including 5G network, artificial intelligence and the Internet of things.

“Global business conditions for Korean companies in the pandemic era are worse than they were in the Asian and global financial crises,” said Kim Bong-man, head of FKI’s international cooperation division. “The government needs to work out a policy to overcome the current crisis by cooperating with the countries in which they are investing.”

Write to Jeong-Soo Hwang at hjs@hankyung.com