Profit growth of domestic-oriented companies in South Korea has far outpaced that of exporters, as a strong local currency helped them reduce costs and gave them an advantage in price-setting, data showed Monday.

The combined net profit of 25 major domestic-focused firms here is estimated at 1.81 trillion won ($1.67 billion) in the fourth quarter of 2012, up 104.3 percent from 888.5 billion a year earlier, according to the data by local financial information provider FnGuide Inc.

The corresponding figure for 84 leading South Korean exporters, however, is expected to have grown only 29.9 percent on-year to 13.9 trillion won over the cited period, the data showed.

Analysts said the widening gap between local market-based companies and exporters is mainly attributable to the rapid ascent of the Korean currency, spurred by aggressive monetary easing in Japan. The Korean won gained about 15 percent against the Japanese yen in 2012.

A long streak of the won’s rise against the fast-depreciating yen has hurt local exporters as they suffered a drop in their price competitiveness against rivals from Japan and China in the global market.

“Competing with Chinese rivals that offer cheaper prices worsened their profitability, along with the currency impact,” said Kim Hyung-joo, an economist at LG Economic Research Institute.

“In contrast, domestic-oriented companies set their product prices in the local market and have reduced costs amid the economic slowdown, which became an advantage,” he added.

Oh Sung-jin, the chief economist at Hyundai Securities Co., said the won’s appreciation has probably boosted profits of local food makers since it has helped cut down their import costs of raw materials.

Telecom service providers saw their combined net profit spike 78.5 percent on-year in the fourth quarter of last year, with utility firms’ net losses sharply narrowing to 408.3 billion won from 1.88 trillion won over the cited period.

Among exporters, energy companies’ net profit tumbled 84.1 percent on-year in the October-December period, with that of parts manufacturers falling 18.1 percent over the cited period, the data showed.

Analysts forecast the growth of domestic-focused firms to continue in the first half of this year, led by telecom and medical sectors.

FnGuide expected their first-quarter net profit to jump 178.4 percent to a combined 5.54 trillion won from the previous three months. But it projected exporters will likely post a 27.3 percent on-quarter gain in the first quarter, according to the FnGuide. (Yonhap News)