Korean firms-Q1 earnings
Corporate sales growth slows in Q1 amid higher costs, economic slump
SEOUL, June 20 (Yonhap) -- South Korean companies' sales growth slowed and their profitability narrowed in the first quarter of the year, central bank data showed Tuesday, as higher borrowing costs and increased prices of raw materials ate into their bottom lines amid an economic slump.
Corporate sales increased 0.4 percent in the January-March period from a year earlier, slowing from 6.9 percent growth a year earlier, according to the data from the Bank of Korea.
The data is based on a review of 3,907 companies 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 oil, and an economic slowdown.
Last month, the BOK kept its benchmark rate unchanged at 3.5 percent, the third straight month of a rate freeze, as it trimmed this year's growth estimate in the face of an extended slowdown in exports amid easing inflationary pressure.
With a slowdown in their sales, the firms' profitability also narrowed.
Their operating profit-to-sales ratio stood at 2.8 percent in the first quarter, compared with 6.3 percent a year earlier.
The firms' average debt-to-equity ratio came to 95 percent at the end of March, up from 92.1 percent a year ago.
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