Korean firms-2022 earnings

Korean firms-2022 earnings

Corporate sales growth slows in 2022 amid higher costs

SEOUL, June 13 (Yonhap) -- South Korean companies' sales growth slowed and their profitabilitynarrowed last year, central bank data showed Tuesday, as higher borrowing costs and increased prices of raw materials ate into their bottom line.

Corporate sales increased 16.9 percent last year from a year earlier, slowing from 17.7 percent growth the previous year, according to the data from the Bank of Korea.

The data is based on a review of 30,129 that are subject to external audits.

The slowdown in sales growth and profitability came amid higher borrowing costs and increased prices of raw materials, such as oils.

The central bank held its key interest rate steady at 3.5 percent for the third straight time last month, after having delivered seven consecutive hikes in borrowing costs since April last year.

By sector, manufacturing businesses saw their sales growth slow to 16.4 percent from 19.7 percent over the cited period, according to the BOK.

However, sales at the nonmanufacturing sector, led by electricity and gas-related companies, grew 17.5 percent from 15.3 percent.

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

Their operating profit to sales ratio stood at 5.3 percent last year, compared with 6.8 percent the previous year, while their net profit to sales also slowed from 7.6 percent to 5.2 percent over the cited period.

The firms' average debt-to-equity ratio came to 102.4 percent last year, up from 101 percent the previous year.

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