The Korea Herald


Top 30 biz groups' retained earnings hit record high

By a2016032

Published : June 12, 2017 - 09:59

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South Korea's top 30 business groups saw their cash reserves hit an all-time high in March as they remained reluctant to invest or hire amid the country's sluggish economy, data showed Monday.

The combined retained earnings of 178 listed companies affiliated with the leading family-controlled conglomerates reached 691.5 trillion won ($615 billion) as of end-March, up nearly 10 trillion won from three months earlier, according to the data from conglomerate tracker

Over the past five years, the amount surged by 176 trillion won, with Samsung and three leading groups alone seeing a jump of 146.4 trillion won.

Retained earnings refer to accumulated earnings held by a company after taxes and dividends are paid out. The reserves also include capital surpluses.

A gain in such surplus cash reserves usually reflects a firm's improved financial health, but it also could mean the company is reluctant to spend on investment, hiring and dividends.

Samsung, the country's top conglomerate, held the largest retained earnings of 219.5 trillion won, up 42 percent from the end of 2012.

Retained earnings held by No. 2 conglomerate Hyundai Motor Group shot up 56 percent over the cited period to 121.7 trillion won as of end-March.

Cash reserves held by energy and telecom conglomerate SK Group spiked 66 percent to 70.6 trillion won, with LG Group chalking up a 26 percent jump to 48.8 trillion won, the data showed.

The increase came despite the previous government's push to encourage local firms to spend more on investments, dividends and employment through diverse tax incentives as part of efforts to galvanize flaccid domestic demand.

Meanwhile, analysts estimated the total retained earnings of the top 30 groups' listed and unlisted affiliates, which number approximately 1,200, to exceed 1,000 trillion won. (Yonhap)