Q1 Companies' 'Growth, Profitability, and Stability' All Deteriorate... "Impact of Semiconductor Slump"

In the first quarter of this year, the growth, profitability, and stability of externally audited corporate enterprises (external audit companies) all deteriorated. This is interpreted as being influenced by significant operating losses in some large corporations due to sluggish semiconductor exports.

According to the corporate management analysis results announced by the Bank of Korea on the 20th, the sales growth rate of external audit companies in the first quarter was 0.4%, significantly reduced compared to the previous quarter (6.9%).

By industry, manufacturing turned downward (2.6% → -2.1%), and non-manufacturing also shrank by more than half (12.6% → 3.6%). By company size, both large corporations (7.5% → 0.7%) and small and medium enterprises (4.3% → -1.2%) saw a decrease in sales compared to the previous quarter.

The total asset growth rate was 1.9%, nearly half of that in the same quarter last year (3.7%).

Regarding profitability, the operating profit margin to sales of external audit companies was 2.8%, significantly down from the same quarter last year (6.3%).

Both manufacturing (8.4% → 2.5%) and non-manufacturing (4.0% → 3.2%) declined, with the decrease being larger in large corporations (6.6% → 2.4%) than in small and medium enterprises (5.3% → 4.7%).

The pre-tax net profit margin to sales was 5.0%, also down from the same quarter last year (8.1%).

The debt ratio, which indicates the stability of external audit companies, rose to 95.0% compared to the previous quarter (92.1%).

Both manufacturing (69.6% → 72.9%) and non-manufacturing (130.7% → 132.9%) increased, and by company size, both large corporations (89.4% → 92.6%) and small and medium enterprises (106.1% → 106.6%) rose.

The dependence on borrowings increased to 26.0% from the previous quarter (25.3%).

Lee Seong-hwan, team leader of the Corporate Statistics Team at the Bank of Korea's Economic Statistics Bureau, explained, "Due to the slowdown in IT demand, exports in the semiconductor sector significantly decreased, and the decline in petroleum product prices caused the growth and profitability of the manufacturing sector to fall." He added, "In non-manufacturing, the growth slowed due to the base effect of last year's sales increase in the electricity and gas sectors."

Lee analyzed, "The poor performance in the first quarter was largely influenced by massive operating losses of top-selling large corporations in the manufacturing electrical and electronics sector. Excluding the semiconductor sector, the situation is not considered significantly bad."

The Bank of Korea conducted a survey from the 8th of last month to the 2nd of this month targeting 21,042 companies subject to external audits as of the end of 2021, excluding companies meeting certain conditions.

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