Korean Business Suffers in 1st Quarter

A number of firms listed on the Korea Stock Exchange reported a combined net profit of $12.1 billion in the first quarter 2005. This was down 16.2 percent from 2004.

Why?
High oil prices and a stronger Korean won against the dollar combined to worsen their bottom lines.

Most significant was that net income plunged as leading exporters as Samsung Electronics, LG, Hyundai and Kia were hit hard by a stronger won.

Essentially, the Korean won’s appreciation weakened corporate earnings from exports while higher oil prices raise production costs for manufacturing firms.

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