Three Korean memory manufacturers show mixed results
But debts mount
The beleaguered South Korean economy, combined with a worldwide slump in memory prices, have had an impact on the results of Hyundai, Samsung and LG. The world's largest memory manufacturer, Samsung, performed best, with an increase in profit up to $113 million for the first six months of 1998, from $92 million in the same period last year. Sales for the half year also rose by 18 per cent to $7.9 billion. Samsung was boosted by strong sales of telecoms equipment, said analysts, but semiconductor and consumer electronics sales remained weak. Samsung also benefited from the weakness of the South Korean won against the dollar, and meant it boosted its earnings from exports. But the other South Korean giants which make memory fared less well. Hyundai posted a $250 million loss for the period, compared with a $113 million profit last year. The loss came on sales up 63 per cent to $1.75 billion. Also making a six-month loss was LG Semicon which lost $188 million, against a $12 million profit last year. Again sales were up, this time by 42 per cent to $912 million. A Coopers & Lybrand financial audit of South Korean company debt - at the end of 1997 - showed that many of the chaebols owed banks large amounts of money. Samsung had $5 billion in long-term loans and $1 billion in short-term, LG had $2.9 billion in long-term debt and $276 million in short term and Hyundai's long-term debt was $3.27 million with its short-term debt standing at $1.47 billion. The government of South Korea is still pushing these three companies to consolidate their business activities but so far they have resisted attempts to do so.