Korean companies' sales, profitability improve in Q1

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Korean companies' sales, profitability improve in Q1

Published: 20 Jun. 2024, 19:17

Containers are piled up in the yards of the Sinseondae and Gamman terminals at Busan Port. [NEWS1]

Korean companies' sales and profitability improved in the first quarter of the year, central bank data showed Thursday, as the economic recovery continued amid high borrowing costs and increased prices of raw materials.

Corporate sales increased 1.2 percent on year in the period from January to March, rebounding from the previous quarter's 1.3 percent on-year decline, according to the data from the Bank of Korea.

The data is based on a review of 22,962 companies that are subject to external audits.

With a slowdown in their sales growth, the firms' profitability also improved.

Their operating profit-to-sales ratio stood at 5.4 percent in the first quarter, compared to a 2.8 percent advance the previous quarter, the data showed.

The improved sales and profitability came amid higher borrowing costs and increased prices of raw materials, such as oil, and an economic slowdown.

But companies' financial soundness deteriorated in the first quarter.

The firms' average debt-to-equity ratio came to 92.1 percent in the first quarter, up from 89.2 percent the previous quarter, according to the data.

Korea's central bank held its key interest rate steady at 3.5 percent for the 11th straight time last month in the face of prolonged restrictive stances in major economies and still-high inflation.

The country's economy grew at the fastest pace in over two years in the first quarter of the year as the recovery in exports continued and private spending remained firm.

The country's real gross domestic product — a key measure of economic growth — increased 1.3 percent on quarter in the January-March period, following a 0.5 percent on-quarter gain the previous quarter.

Yonhap