S. Korean conglomerates see no sign of earnings recovery

By Kim Deok-hyun
SEOUL, June 1 (Yonhap) -- South Korean conglomerates expected their earnings to
remain sluggish towards the end of this year, hit by a sharper decline in exports
and stubbornly weak domestic consumption, a survey showed Monday.

The Federation of Korean Industries said in a statement that 60 percent of the
top 20 "chaebol," used to refer to Korea's family-controlled conglomerates,
predicted their operating profits for the second half will likely to be at a
similar level to the first-half of this year.
The survey showed 25 percent of the chaebol predicted their operating profits to
fall in the July-December period, while 15 percent expected a modest recovery,
according to the statement.
"As major conglomerates depend on exports, most of them don't expect their
earnings to rebound in the second half," the federation said. Conglomerates such
as Samsung and Hyundai Motor dominate the South Korean economy.
In May, exports plunged 28.3 percent from a year ago to US$28.2 billion, compared
with a 19 percent slide from the previous month, the government said earlier in
the day.
The pace of decline in exports will likely to accelerate in the coming months if
the South Korean currency strengthens against the U.S. dollar, the federation
said.
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