Real estate slump continues to hurt construction firms

Home > Business > Industry

print dictionary print

Real estate slump continues to hurt construction firms

More than one out of every 10 construction companies in Korea made less profit than their interest expenses for a third consecutive year in 2018, a report showed Wednesday.

According to the report from the Korea Research Institute for Construction Policy, 514, or 28 percent, of 1,833 construction firms had an interest coverage ratio of less than 1 in 2018, up from 23.8 percent in 2017.

The interest coverage ratio is obtained by dividing a company’s operating profit by its interest expenses. A reading below 1 means the company’s operating profit cannot cover its interest expenses.

Those with an interest coverage ratio of less than 1 for three consecutive years are often referred to as marginal or zombie firms.

The number of such companies came to 146, or 10.4 percent of the total, last year, up 1.2 percentage points from 9.2 percent a year earlier, the report said. It also cited a slump in the real estate market for the increase.

Yonhap

More in Industry

SK unit buys stakes in LNG customers in China

LG Electronics to release budget phones in more markets

Beer fans leave the booze behind

Sex offender doxxing site crowdsources justice

These little piggies didn’t go to the market

Log in to Twitter or Facebook account to connect
with the Korea JoongAng Daily
help-image Social comment?
lock icon

To write comments, please log in to one of the accounts.

Standards Board Policy (0/250자)

What’s Popular Now