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[Alpha Biz=(Chicago) Reporter Kim Jisun] The Korea Ratings said on the 24th that the financial burden of SK Group and Hanwha Group has been increasing due to their recent large-scale investment, adding that they need to adjust the pace of their investment to defend their credit rating.
Korea Ratings said in a SK Group analysis report, "Since the second half of last year, profitability has deteriorated significantly due to worsening memory semiconductor business, falling oil prices, and reduced refining margins. Surplus cash flow (FCF) recorded a deficit due to increased investment burden."
"The burden of borrowing increased last year as major affiliates suffered poor business performance and continued to raise external funds related to operating funds and facility investment," he said. "An active financial strategy is needed to curb the growing burden of borrowing."
According to Korea Ratings, SK Group's facility investment (CAPEX) increased from 23.3 trillion won in 2021 to 35 trillion won last year.
As a result, the annual FCF deficit reached 15.9 trillion won last year, the highest in the past five years.
The FCF deficit is expected to continue as investment in the battery sector continues amid a sharp drop in operating cash centered on the semiconductor sector until the first half of this year.
SK Group's sequential deposit to EBITDA (pre-amortization operating profit) was 1.9 times as of last year, but it was 5.4 times as of the first quarter of this year.
However, the downward pressure on creditworthiness is not high, given that major affiliates are expected to gradually improve profitability.
"SK Hynix will make an operating surplus in the first half of next year due to the reduction of memory semiconductors from the second half of this year," Korea Ratings said. "It is possible to recover financial stability from a medium-term perspective by controlling additional borrowing burdens such as reduced facility investment."
AlphaBIZ 김지선(stockmk2020@alphabiz.co.kr)
