Virus pandemic does not chip away at bottom lines of big firms
Due to the virus pandemic this year, most South Korean companies are struggling to find their feet because consumers are less ready to spend. But not all players are languishing.
LG Chem, the world’s foremost manufacturer of rechargeable batteries, announced this week that its third-quarter operating profit amounted to 902.1 billion won ($785 million).
It marks the first time that the Seoul-based chemical giant to top 900 billion won in a quarterly profit in its 73-year history _ it was founded back in 1947.
Earlier last week, the country’s two electronics giants also surprised the market with stellar performances during the July-September period.
Samsung Electronics chalked up an operating profit of 12.3 trillion won during the three months, which is the highest in two years. The two cash cows of smartphones and memory chips boosted it.
Samsung’s cross-city rival LG Electronics saw its operating income soar 22.7 percent year-on-year to 959 billion won, which is the biggest for any third quarter in its history.
Observers point out that pent-up demand underpinned the two competitors after the stay-at-home restrictions somewhat eased.
But Prof. Sung Tae-yoon at Yonsei University said that we cannot expect the full recovery of major companies.
“It’s true that a few big firms recorded performances, which beat the market expectations. But in some cases, the solid profits are thanks to the drastic reduction of marketing costs,” he said. “It is too early to talk about a full-fledged recovery.”