Local companies hit profit record, BOK says

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Local companies hit profit record, BOK says

The operating profit margin of Korean companies hit a record high in the first three months of the year on strong semiconductor sales, central bank data showed Friday.

The operating profit to sales ratio of the country’s nonfinancial companies reached 7.4 percent in the January-March period, up from 7.1 percent a year earlier, according to the data from the Bank of Korea (BOK).

It is the highest quarterly figure since the BOK started compiling the data in 2015.

The pretax net profit margin also posted an all-time high of 8.2 percent in the first quarter. It was 8 percent in the first three months of 2017.

But their sales slowed sharply to 3.4 percent from 7.9 percent over the same period.

Manufacturing companies posted a 3.4 percent on-year gain in sales in the first quarter, while their operating profit rate also widened to a record 8.8 percent. Nonmanufacturers’ sales also rose 3.4 percent on-year in the three-month period, with their operating profit margin totaling 5.4 percent.

In particular, first-quarter sales in the machinery and electronics sectors jumped 11.7 percent on-year, and their operating profit soared by 15.4 percent.

“Businesses in the electronics and machinery sectors saw their profitability rise,” said a BOK official. “This was driven by semiconductor manufacturers, which produced high-profit premium chips.”

The data was based on a sample survey of 3,324 out of 16,645 companies with 12 billion won ($11 million) in assets.

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