South Korean companies will likely report highest ever first-quarter earnings thanks to brisk exports of semiconductors and petrochemical goods as well as diversified export destinations. They are expected to report such stellar performance despite political turmoil at home and China’s retaliation against Korea’s deployment of an U.S. antimissile system, Terminal High Altitude Area Defense System (THAAD), and increasing protectionism on the global trade front.

According to Seoul-based market data provider FnGuide on request from Maeil Business Newspaper on Monday, combined operating profit of 524 Kospi- and Kosdaq-listed companies for the first quarter ended March this year jumped 26.7 percent to 44.68 trillion won ($40 billion) from the same period of last year. Combined sales climbed 7.9 percent to 468.3 trillion won over the same period.

Both operating income and sales are record highs for the first quarter, with the 524 surveyed companies accounting for 84 percent of all listed firms based on first-quarter sales in 2016. FnGuide data showed that combined sales of listed companies that reached 424 trillion won in the first quarter of 2014 retreated to 405.8 trillion won a year later. But total sales rebounded to 433.8 trillion won over the same period of 2016.

Their combined operating profit in the January-March period has also remained on the upward trend in recent years, rising from 28.2 trillion won in the first quarter of 2014 to over 35 trillion won in 2016. This year, the figure is expected to have reached a record high of 44.6 trillion won for the quarter, up 26.7 percent from the previous year.

The improved performance of Korean firms is largely owed to recovery in exports of semiconductors and petrochemical goods. According to the Ministry of Trade, Industry and Energy, Korea has exported $7.5 billion worth of semiconductors in March, up 41.9 percent from the same month of last year. The country has also shipped a record amount of petrochemical goods worth $4.09 billion last month. Also, Asia’s largest economy has been actively seeking to diversify export destinations of its goods beyond China.

Thanks to growing global demand, Korean chipmaker SK Hynix Inc. is expected to see its first-quarter operating profit increase a whopping 287 percent on year on a 61 percent gain in sales. Operating income and sales of the country’s leading chemical and battery making company LG Chem Ltd. are also expected to surge 45 percent and 26.3 percent, respectively, over the same period.

Meanwhile, the country’s heavyweight Samsung Electronics Co. that accounted for 11.5 percent of combined sales of 524 listed firms as of last year’s first quarter is expected to report a 0.4 percent drop in sales for the first quarter of this year despite a 39 percent gain in operating profit.

But brisk sales of other companies should make up for the drop in the tech giant’s sales, leading overall Korea Inc.’s sales to increase. Combined sales of Kospi-listed companies excluding Samsung Electronics were 1,444 trillion won last year, up 0.8 percent from the previous year. Net profit also increased 18.2 percent to 57.6 trillion won and operating income 16.5 percent to 92.06 trillion won.

By Moon Il-ho, Yoon Jin-ho, Lee Yong-gun

[ⓒ Pulse by Maeil Business News Korea & mk.co.kr, All rights reserved]