SEOUL, March 13 (Yonhap) -- The profitability of South Korea's leading companies hovered below that of global peers last year, data showed Wednesday, apparently due to their limited business portfolios and vulnerability to currency fluctuations.
According to the data compiled by Samsung Securities Co., South Korea's top industry players saw their return on equity (ROE) lag behind their global peers in 15 sectors last year, while only four sectors performed better.
ROE, a key barometer of a firm's efficiency at generating profits, measures net income as a percentage of shareholders' equity.
South Korea's tech giant Samsung Electronics Co. saw its ROE reach 17.9 percent in 2012, compared with 22.7 percent for U.S.-based Intel Corp.
Hyundai Motor Co., South Korea's top automaker, saw its ROE reach 15 percent last year, while Ford Motor Co.'s ROE came to 36.6 percent.
The country's top pharmaceutical firms, banks, credit card companies and oil refiners also saw their ROEs fall far behind their global peers in 2012, the data added. In contrast, steelmakers, mobile carriers, consumer goods producers and resources firms performed better.
Market watchers said local firms' lower profitability came as they are highly vulnerable to fluctuations in the foreign exchange market, and their business areas remain relatively smaller.
"South Korean companies should diversify their business portfolios and develop capabilities to deal with currency and policy changes overseas," said Baek Heung-gi, a researcher at the Hyundai Research Institute.
A volatile foreign exchange market, such as a steep appreciation of the won against the U.S. dollar, inflicts foreign exchange losses on exporters, making South Korean goods more expensive overseas.
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