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To: LK2 who wrote (4185)	8/16/1998 2:00:00 PM
From: LK2	Respond to of 9256

A financial snapshot of current South Korean chip maker problems: ====================== Message 5508906 Talk : International : Asia Forum To: Larry Kuznets (5587 ) From: Joseph Beltran Sunday, Aug 16 1998 10:54AM ET Reply # of 5588 Here are some specifics on the current financial picture of the 3 largest south korean chip makers: pubs.cmpnet.com These companies are barely surviving on operating cash flow. No lender in his right mind would lend $$$ to these companies to purchase new capital equipment. By all accounts these divisions should have gone belly up some time ago. =========================== pubs.cmpnet.com Semiconductor Business News A service of Semiconductor Business News, CMP Media Inc. Story updated at 4 p.m. EDT/1 p.m. PDT, 8/13/98 DRAMs erode results at Korean chip makers By Jack Robertson WASHINGTON -- The DRAM price collapse clobbered the earnings of Korea's three big chip makers during the first half of 1998. Samsung Electronics Co. Ltd. managed to squeeze out a small profit gain in the first six months of the year while Hyundai Electronics Industries Co. Ltd. and LG Semicon Co. Ltd. continued their string of losses. Samsung reported net earnings of $113 million (150 billion won) in the first half, up from $92 million (123 billion won) for the same period a year ago. Sales totaled $7.9 billion for the six months, up 18% from the year-ago period. Hyundai Electronics had a $250 million loss (330 billion won) in the first half, compared with a profit of $11.3 million in the period last year. The loss came in face of a sharp increase in sales in the first half -- up 63% to $1.75 billion (2.3 trillion won) compared to last year. LG Semicon reported a $188 million loss (250 billion won), compared with a $12 million profit in the first half of 1997. The company's first half sales rose 42% to $912 million (1.2 trillion won) compared to revenues a year ago. Massive levels of debt continued to plague the Korean chip companies. Hyundai reported its debt at June 30, totaled $8.4 billion, which is equal to 930% of its equity. Hyundai said the lower value of the won resulted in its foreign-currency debts doubling in value in the six month period. Meanwhile, LG Semicon said its foreign currency debt was $3 billion at the end of June, and its total debt level equaled more than 500% of its equity. A financial audit of the Korean company debt statements by Coopers & Lybrand revealed that at the end of 1997 Samsung Electronics had $251 million debt with Citibank, and much smaller debt levels with Chase Manhattan Bank. ING, Tokai Bank and Long Term Credit Bank of Japan. Samsung had $5 billion in long-term loans and $1 billion in short-term loans, predominately with domestic banks and government lending agencies. The audit showed LG Semicon had $2.9 biliion in long-term and $276 million in short-term loans at the end of 1997 virtually all with Korean financial institutions. It also revealed that LG had adopted a debt repayment schedule to pay back $773 million in 1999, $1.5 billion in 2000m $493 million in 2001 and $265 million in 2002. Hyundai short-term debt at the end of last year was $1.47 billion and long-term debt was $3.27 million. Hyundai's repayment schedule was disclosed as $1.29 billion in 1999, $1.34 billion in 2000, $563 million in 2001 and $290 million in 2002. =================================