The Bank of Korea: "Corporate Growth Improved in Q2... Profitability and Stability Declined"

(Data provided by Bank of Korea)

In the second quarter of this year, both manufacturing and non-manufacturing sectors, including petroleum, chemicals, and construction, showed an increase in sales, indicating a favorable trend in corporate growth. However, operating profit margins declined due to rising raw material prices, and the debt ratio also increased significantly, revealing a deterioration in profitability and stability.

According to the "2022 Q2 Corporate Management Analysis" released by the Bank of Korea on the 14th, the sales of domestic externally audited corporations in the second quarter of this year increased by 20.5% compared to the same period last year, expanding the growth rate compared to the previous quarter (17.0%).

By industry, both manufacturing (18.6%→22.2%) and non-manufacturing (15.4%→18.2%) sectors saw an increase in growth rates, and by company size, both large enterprises (20.1%→23.0%) and small and medium enterprises (7.5%→10.2%) showed growth trends.

The total asset growth rate was 2.3%, also increasing compared to the same quarter last year (1.4%). Both manufacturing (1.4%→2.9%) and non-manufacturing (1.3%→1.6%) sectors expanded their growth rates, but by company size, large enterprises (0.8%→2.2%) saw an increase while small and medium enterprises (3.5%→2.9%) experienced a decrease.

The operating profit margin to sales in the second quarter was 7.1%, slightly down from 7.4% in the same quarter last year. The manufacturing sector's operating profit margin decreased from 9.0% to 8.6%, and the non-manufacturing sector from 5.4% to 5.1%. Both large enterprises (7.7%→7.4%) and small and medium enterprises (6.4%→5.8%) showed a downward trend.

The pre-tax net profit margin to sales also declined to 7.2% compared to 8.2% in the same quarter last year. The pre-tax net profit margin is a profitability indicator that comprehensively reflects management performance from both operating activities and financial activities of a company.

The debt ratio rose to 91.2% from 88.1% in the previous quarter. Both manufacturing (65.7%→70.8%) and non-manufacturing (123.4%→126.7%) sectors increased, and by company size, both large enterprises (83.2%→87.9%) and small and medium enterprises (107.1%→108.3%) showed an upward trend.

The debt dependency ratio, which indicates the proportion of borrowed funds in total capital, recorded 24.5%, also rising compared to 23.9% in the previous quarter.

This content was produced with the assistance of AI translation services.