Cumulative free cash flow (FCF) at listed companies among Korea's top 500 firms increased by more than 20 trillion won year-on-year in the first three quarters of 2024. The surge is attributed to a semiconductor super-cycle that significantly improved cash generation at major chipmakers including Samsung Electronics (005930.KS) and SK hynix (000660.KS).
According to data released Wednesday by CEO Score, a corporate data research institute, combined FCF at 237 listed companies among the top 500 firms excluding financial companies reached 69.65 trillion won ($51.4 billion) in the first nine months of 2024, up 20.6 trillion won or 42.0% from 49.05 trillion won in the same period last year.
Free cash flow is calculated by subtracting capital expenditures from operating cash flow and serves as an indicator of a company's actual financial condition and dividend capacity.
Operating cash flow for the first three quarters rose 24.5% to 164.48 trillion won, while capital expenditures expanded 14.2% to 94.83 trillion won. Companies with increased FCF totaled 127, outnumbering the 110 firms that saw declines.
Samsung Electronics recorded the highest FCF through the third quarter at 19.04 trillion won, up 42.6%. SK hynix followed with FCF of 14.04 trillion won, surging 138.6% as operating cash flow nearly doubled. Kia (4.27 trillion won), Korea Gas Corporation (3.96 trillion won), HD Hyundai Heavy Industries (3.46 trillion won), Korea Electric Power Corporation (2.87 trillion won), and Hyundai Mobis (2.37 trillion won) also ranked among the top performers.
Conversely, four companies recorded negative FCF exceeding 1 trillion won: Hyundai Engineering & Construction (-1.47 trillion won), LG Energy Solution (-1.45 trillion won), Doosan Enerbility (-1.04 trillion won), and LG Display (-1.21 trillion won).
SK hynix posted the largest year-on-year FCF increase at 8.15 trillion won, followed by Samsung Electronics (+5.69 trillion won) and Hanwha Ocean (+2.92 trillion won). Hyundai Motor (005380.KS) saw the steepest decline, with FCF falling 72.0% to 1.37 trillion won amid delayed tariff negotiations. Hyundai Engineering & Construction, SK Telecom, and Kia each recorded declines exceeding 1 trillion won.
By sector, the IT and electronics industry led gains with total FCF of 29.75 trillion won, up 96.1%. The automobile and parts sector posted the largest decline, falling by 3.94 trillion won.
"Samsung Electronics and SK hynix drove the FCF growth on the back of favorable semiconductor market conditions," CEO Score said. "The increased free cash flow has led to more active corporate investment."
