Revised estimate comes after reduction in government’s growth projection


The average level of revenue KOSPI-listed firms are expected to generate in the second half of the year dropped, stock analysis said Tuesday, raising concerns over a slower economic growth on weaker consumption and waning exports.

The estimation of operating profits for 115 listed companies on KOSPI for the July-December period fell to a total of 47.68 trillion won ($44.7 billion) this week, from 48.17 trillion won of January, according to analysis by FN Guide, a leading online financial information provider. The projections fell for 58 companies of the total analyzed.

The drop in the revenue forecast reflects declining growth projections of major exporters of Asia’s fourth-largest economy. This darkening of projections comes as the government last week cut the growth forecast and raised the inflation outlook on weakening consumption and commodity price volatility. The won’s rise to a 34-month high against the dollar Tuesday added concern for exporters, which raised speculation that Seoul will tolerate a stronger won in the coming months to tame inflation at the expense of losses by exporters.

“Slowing global demand and price volatilities of commodity imports could dampen performance of major exporters here. They could drive general investor sentiment down and slow the economy for the next six months,” Yoo Byung-kyu, a director at Hyundai Research Institute said.

The operating profit estimated for Samsung Electronics in the July-December period fell from 9.47 trillion won in January to 8.84 trillion won this week, down 11.1 percent. The projection for LG Electronics also fell from 795.4 billion won to 639.8 trillion won in the same period.

Forecast for Korean Air and Asiana Airlines dropped by 232.5 billion won and 94.8 billion won each in the same period.

The government expects the economy to grow 4.5 percent this year, down from the 5 percent projected earlier. It said inflation will likely hit 4 percent, upping its forecast from 3 percent after the Consumer Price Index exceeded Seoul’s target range of 2 to 3 percent for the past half a year.

By Cynthia J. Kim (cynthiak@heraldcorp.com)