What Caused the 1.7% Drop in S. Korean Large Firms' Combined Operating Profit in H1 2025?
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Synopsis
In a revealing report, major South Korean firms, excluding SK hynix, faced a 1.7% drop in operating profits for H1 2025, amidst economic challenges. Discover the key players, their performance, and the implications of these results on the broader economy.
Key Takeaways
- 1.7% decline in operating profit of major firms, excluding SK hynix.
- SK hynix's operating profit nearly doubled to 16.7 trillion won.
- Samsung Electronics reported a 33.4% decrease in profits.
- Sales of top firms rose 5.5% year-on-year.
- Operating losses reported by Samsung SDI, SK Energy, and Lotte Chemical.
Seoul, Aug 17 (NationPress) The collective operating profit of major South Korean enterprises, excluding the leading chip manufacturer SK hynix Inc., experienced a 1.7 percent decline in the first half of 2025 compared to the previous year, according to industry data released on Sunday.
As per the findings from corporate analysis firm CEO Score, 342 of the nation’s top 500 firms by sales that disclosed their mid-year results achieved a total of 1,655.3 trillion won in sales for the January to June timeframe, reflecting a 5.5 percent increase from a year ago.
In terms of operating profit, the aggregated figure rose by 5.9 percent year-on-year to reach 118.5 trillion won, as reported by Yonhap news agency.
However, when excluding SK hynix, which recorded an impressive operating profit of 16.7 trillion won during this period, the combined operating income for other firms fell by 1.7 percent.
SK hynix saw its operating profit nearly double from 8.4 trillion won last year, fueled by surging demand for high bandwidth memory (HBM) amidst a growing trend in artificial intelligence (AI) computing.
In second place, Samsung Electronics reported an operating profit of 11.4 trillion won for the first half, marking a 33.4 percent decline from the same period last year.
Hyundai Motor Co. posted an operating profit of 7.2 trillion won, followed closely by Korea Electric Power Corp. at 5.9 trillion won and Kia Corp. with 5.8 trillion won.
Conversely, battery producer Samsung SDI Co. reported an operating loss of 831.9 billion won, while both SK Energy Co. and Lotte Chemical Corp. faced operating deficits of 591.6 billion won and 377.1 billion won, respectively.
Moreover, SK hynix announced that its second-quarter operating profit exceeded 9 trillion won (approximately $6.53 billion) for the first time, driven by robust demand for AI chips, particularly high bandwidth memory (HBM).
In a regulatory filing, the company disclosed an operating profit of a record 9.21 trillion won for the April to June period, which is a remarkable 68.5 percent increase from last year, establishing a new quarterly record.
Revenue surged by 35.4 percent year-on-year to 22.23 trillion won, while net income skyrocketed by 69.8 percent to reach 6.99 trillion won.
Both operating profit and sales surpassed the previous all-time highs recorded in the fourth quarter of last year.
Point of View
It is crucial to provide a balanced perspective on the recent financial performance of South Korean firms. The reported decline in operating profits, particularly when excluding SK hynix, signals significant economic challenges. However, it also emphasizes the resilience of key players in sectors like technology and automotive. The overall landscape suggests a need for strategic adaptation in response to evolving market conditions.
NationPress
19/08/2025
Frequently Asked Questions
What is the overall trend in operating profits for South Korean firms in H1 2025?
Overall, the combined operating profit of major South Korean firms, excluding SK hynix, saw a decline of 1.7% in H1 2025 compared to the previous year.
How did SK hynix perform in the first half of 2025?
SK hynix reported the largest operating profit of 16.7 trillion won in H1 2025, nearly doubling from the previous year, driven by high demand for AI chips.
Which companies reported losses in H1 2025?
Samsung SDI, SK Energy, and Lotte Chemical reported operating losses of 831.9 billion won, 591.6 billion won, and 377.1 billion won, respectively.
What was the sales performance of the top firms in H1 2025?
The top 342 South Korean firms reported a combined sales figure of 1,655.3 trillion won, marking a 5.5% increase year-on-year.
What impact does this report have on the South Korean economy?
The decline in operating profits, alongside strong performance from SK hynix, highlights both challenges and opportunities within the South Korean economy, particularly in the tech sector.
