Korea's top 20 conglomerates' Q2 operating profits to fall 7%Updated: 2014-07-10 03:17:29 (KST)
Korea's top 20 conglomerates by market capitalization are expected to turn in disappointing score cards for the second quarter.
According to market researcher FnGuide, the combined operating profit of the top 20 companies is expected to amount to about 18 trillion won, or roughly 17.8 billion U.S. dollars, which is down 7.1 percent from last year.
Their combined sales are also expected to fall about 1-percent to sit at just over 200 billion dollars.
The slip has come on the back of a stronger won, which has hit export-reliant firms the hardest.
Automobile companies' profits will also be affected.
The operating profit for Hyundai Motor, the second largest, is expected to come to roughly 2.3 billion dollars, down 6.7 percent from last year.
During the same period, Kia Motors is also likely to see a drop of almost 21 percent.
The automobile industry says that sales will be similar to last year, driven by the sales of new cars, but operating profits will dip due to the stronger won and marketing expenses related to the Brazil World Cup.
Posco, LG Display and Hyundai Heavy Industries, are also all expected to see a decline.
On the flip side, firms in the financial and IT sectors will likely turn in strong report cards, with firms centered around domestic consumption set to benefit from the strong won.
Samsung C&T is expected to see a jump of about 59 percent; Naver, 32 percent and LG Electronics, 10.3 percent.
LG's mobile communications division is also likely to turn a profit in the second quarter on strong sales of its new G3 smartphone, and that's expected to have a positive effect on the performance cards of affiliates that supply parts to LG and tech giant Samsung Electronics.
Kim Min-ji, Arirang News.