Profitability of local companies drop to lowest level since 2008

The profitability of Korean companies plunged to its lowest level since 2008, data released from Statistics Korea on Tuesday showed.

According to the agency, the return on sales for domestic companies was 3.9 percent in 2013, the lowest level since 2008 when the country was suffering from the global financial crisis.

This means that before deducting corporate taxes, Korean companies earned an average of 39.2 won ($0.04) in net profit last year for every 1,000 won worth of sales.

In 2008, the net income to net sales ratio for companies here was 3.3 percent. The level of profitability recovered and reached 6.2 percent in 2010, but it has since been dropping, marking 5.2 percent in 2011 and 4.7 percent in 2012.

The data is based on a survey of 122,232 companies with 50 or more full-time workers and capital of 300 million won or above. Financial and insurance companies were excluded.