South Korea: Half of government companies are in the red: Electricity, oil, railway corporation
-19 companies cannot pay interest-
“Chosun Ilbo”
(October 29th)
“19 large-scale government-affiliated companies in South Korea cannot pay interest,’zombie companies’
Ministry of Economy and Finance of Korea:
Nearly half of the large government-affiliated companies, 19 companies, predicted that this year they would face serious financial difficulties that would make them unable to pay interest on the profits they earned.
Choo Kyungho
Member of Parliament
Materials submitted by the Ministry of Economy and Finance on the 28th.
Of 350 government-affiliated companies
40 companies with assets of 2 trillion won or more
“Interest coverage ratio” was less than 1.
40 companies “targeted for medium- to long-term financial management”
Of the 40 companies designated by the government as “medium- to long-term financial management targets”
Korea Electric Power Corporation,
Korea National Oil Corporation,
Korail Corporation, etc.
19 companies predicted that “interest coverage ratio is less than 1.”
Interest coverage ratio:
The figure obtained by dividing the annual operating profit by the interest payment cost.
If it is less than 1, it means that the profits earned cannot cover the interest payment.
As of 2016
Nine companies had an interest coverage ratio of less than 1.
As of 2017
It decreased to 6 companies in 2017, but has been increasing every year since then.
As of 2021
If the number of companies increases to 19 this year, it will triple compared to the first year of the Moon Jae-in administration.
Total operating profit
The total operating profit of 40 large-scale government-affiliated companies is expected to be 5.5 trillion won.
Total interest payment cost
Interest payment costs are expected to exceed that, at 6.4 trillion won. There will be a shortage of 1.1 trillion won.
2022
Public Institution Budget Analysis Report
The 40 government-affiliated companies subject to financial management have large debts.
If profitability deteriorates, additional government budget support is inevitable.
40 large-scale government-affiliated companies:
Last year’s debt was 512 trillion won.
It accounts for 94% of all public institutions.
544,800 billion won:
Of 350 companies
Korea Development Bank,
Export-Import Bank of Korea,
Excluding IBK Industrial Bank of Korea,
Calculated based on 347 companies
World view of Toshiyoshi Katsumata
http://hisayoshi-katsumata-worldview.com/archives/27783362.html