Currency risks are growing for Korean companies due to a fall in the won-dollar exchange rate.

A fall in the won-dollar exchange rate in 2020 has amplified currency risks for Samsung Electronics’ overseas business.

Samsung Electronics suffered a foreign exchange loss of 5.38 trillion won in 2020, according to the Financial Supervisory Service on March 1. In 2019, Samsung Electronics earned 3.16 trillion in foreign exchange profit.

“Companies are diversifying the currencies they use to address foreign exchange risks, but the U.S. dollar still has an overwhelming proportion,” said an analyst. “This means that Corporate Korea’s export competitiveness is bound to be sensitive to the won-dollar exchange rate.”

Other Samsung affiliates also suffered huge foreign exchange losses last year. Samsung Electro-Mechanics earned 52.4 billion won in foreign exchange profit in 2019, but lost 35.3 billion won in 2020. Samsung SDI also logged 26.4 billion won in foreign exchange losses in 2020, a sharp contrast from 60.4 billion won in profit a year ago. Samsung SDS suffered a foreign exchange loss of 89.4 billion won in 2020 in a reversal from a profit of 44.8 billion won a year earlier. As a result, the four electronics affiliates of Samsung Group posted a combined 5.53 trillion won in exchange losses.

Korean carmakers could not avoid the foreign exchange shock, either. In 2020, Hyundai Motor Co. and Kia Corp. suffered 971.2 billion won and 143.4 billion won in exchange losses. The two automakers enjoyed 481.8 billion won and 132.2 billion won in exchange profits, respectively, in 2019.

SK Hynix also suffered 47.4 billion won in exchange losses in 2020, although it logged 150 billion won in exchange profits in 2019. POSCO’s exchange loss hit 147.9 billion won in 2020 even though its exchange profit stood at 208.1 billion won in 2019.


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