One third of listed firms have negative cash flows: poll

by Nam Kwang-sik
SEOUL, Dec. 4 (Yonhap) -- About three out of every 10 listed firms in South Korea
posted negative cash flows in the first nine months of the year due to a credit
squeeze, a poll showed Thursday.
According to the survey of 629 listed companies that close their books on Dec.
31, 35 percent registered negative operating cash flows in the January-September
period, despite their operating profits. The figure is the highest level since
1997 when the comparable figure was 23.1 percent.
"The companies' negative cash flows were attributable to growing inventories and
a rise in credit sales," said the Korea Chamber of Commerce and Industry (KCCI),
which took the poll.
Corporate cash flows worsened as the ratio of operating cash flows to sales fell
to 1.6 percent in the nine-month period, even lower than the 5.8 percent seen in
1997 when South Korea faced a financial crisis, it said.
Local companies have been in the hot seat over the past few months as banks are
reluctant to lend money amid a global credit squeeze. The growth of South Korea's
money supply slowed in September as local banks cut down on lending, according to
the Bank of Korea.
The KCCI called on the government to provide more liquidity to local banks in a
bid to help ease a corporate liquidity crunch.
ksnam@yna.co.kr
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