|SUBJECT||Korean Overseas Subsidiaries Performed Well Last Year|
Korean Overseas Subsidiaries recorded improved performances from the year prior thanks to increased overseas market share.
According to the 2010 Business Performance of Korean Overseas Subsidiaries report published by Korea Eximbank (www.koreaexim.go.kr, Chairman & President Yong Hwan Kim) on November 3, a total of 3,893 local subsidiaries recorded USD 478.8 billion in revenue, USD 14.4 billion in operating profits, and USD 9.6 billion in net profits during 2010.
※ 2009 Business Performance of 3,481 Korean Overseas Subsidiaries: USD 364.5 billion in total revenue, USD 8.5 billion in operating profits, and USD 4.8 billion in net profits
The incorporations averaged USD 120 million in sales, an increase of 17.5% from USD 105 million the previous year.
Significantly, net profits for 2010 per company recorded USD 2.5 million, an increase of 80.7% from USD 1.4 million in 2009, highlighting the extent of improvement.
The overall net profit ratio in 2010 of 2.0% represent a slight increase from 1.3% in 2009.
By industry, manufacturing and wholesale & retail sales sectors recorded net profit ratios of 2.3% and 0.9%, respectively. The mining sector recorded 13.6% thanks to the sharp rise in oil prices.
By region, incorporations in China made slight improvements in net profit ratios from 2.8% in 2009 to record 3.2% in 2010 primarily due to increased domestic consumption. Incorporations in the US recorded 2010 net profit ratios of -0.1% but the figure represents an improvement from -1.3% of the previous year.
In contrast, incorporations in developing nations achieved strong performances as nine of the top ten countries with the highest net profits were developing countries.
* Top Ten Countries in Net Profit in 2010: China, Brazil, Indonesia, India, Australia, Thailand, Malaysia, Russia, Slovakia, and Poland
In addition, it is clear that FDI contributes greatly to total exports and imports of Korea as well as to respective parent companies.
2010 exports from parent companies to overseas incorporations totalted USD 144.9 billion, accounting for 31.1% of Korea's total exports.
In contrast, imports by parent companies from overseas incorporations totaled USD 80.7 billion and accounted for 19% of Korea's total imports.
The rate of return on FDI increased from 8.7% to 11.7% year on year.
With improved business performances of overseas subsidiaries, there have been positive effects on parent companies including distribution of USD 1.65 billion in dividends to Korean investors.
According to a representative of Korea Eximbank, "It is significant that overseas Korean incorporations achieved such strong business performances last year despite the sluggish economies of advanced countries. Their business performances will have increasing significance to Korea’s economy in the years to come."
In mid-November, Korea Eximbank will publish the 2010 FDI Report which includes business performance results of overseas Korean incorporations.