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Thursday July 27, 3:01 PMS.Korea's Woori Sec Q1 net profit more than doublesSEOUL, July 27 (Reuters) - Woori Investment and Securities Co. , South Korea's No. 2 brokerage by market value, said on Thursday it more than doubled its quarterly profit as trading values rose and one-off gains bolstered earnings.But profit growth is likely to slow from 2005's blistering pace as investors trade less, denting commission income. Woori's operating profit fell from the prior quarter, and its shares pared gains following the results released late in the session. The securities firm aims to diversify into asset management, but will face strong competition from bigger financial institutions such as Mirae Asset Group and rival brokerages such as Samsung Securities Co. . Woori, which brokers around 8 percent of the country's stock trading, earned 75.6 billion won ($79.40 million) in its fiscal first quarter ended June, against 29.8 billion won a year earlier, and the 59.5 billion won it earned in January-March. However, net profit was helped by a 9.8 billion won gain from the sale of part of a stake in chip maker Hynix Semiconductor Inc. and a 20.2 billion won gain from the sale of part of a holding in unlisted bourse operator Korea Exchange. Operating profit rose 64.1 percent to 63.3 billion won from the year earlier period, but was 26.5 percent lower than the preceding quarter. Woori Securities still holds 3.9 million shares in Hynix, worth 124 billion won at current market values. Woori's results compared with 82.3 billion won earned in the same quarter by third-ranked Daewoo Securities Co. . Woori's core earnings face slowing growth following a sharp downturn in domestic stock markets. The benchmark KOSPI index has gone from Asia's top performing major index in 2005 to its worst this year, dropping more than 12 percent since hitting a life high of 1,464.70 on May 11. Combined trading values in the KOSPI and junior Kosdaq index's reached 5.25 trillion won in April-June, higher than the 3.62 trillion won a year earlier, but down 23 percent on each of the preceding two quarters. Analysts see no meaningful recovery this year as retail investors, who account for the bulk of brokerages' commissions, opt instead for indirect investments such as stock savings plans, whose popularity exploded last year. Woori, which derives more than three-quarters of its revenue from commissions, hopes to offset this by grabbing a bigger slice of South Korea's $200 billion asset management industry. The investment house has said it will rely on major stakeholder Woori Financial Group , South Korea's third-biggest financial services provider, to increase the contribution to revenues from the sale of funds to 13-15 percent this year, up from 11 percent in 2005. But it will be up against Mirae Asset Group, the country's biggest asset manager, and other institutions such as Kookmin Bank that also want to increase the sale of funds. Shares in Woori Securities ended up 1.59 percent on Thursday, outperforming a 1.34 percent gain in the main index , but less than the 3.56 percent gain in the brokerage sub-index . Shares in Woori Securities fell more than 7 percent in April-June, compared with a 4.7 percent fall in the KOSPI index. |
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