Last Year Corporate Net Profit Decreased by 11%... Earned 61 Won from Selling 1000 Won

Statistics Korea Announces '2022 Survey on Business Activities'

Last year, corporate sales increased at the largest rate in 14 years, but net profit decreased by 11%. This was due to the decline in manufacturing companies' performance, especially in semiconductors, caused by rising raw material prices amid the Russia-Ukraine war.

According to the 2022 Corporate Activity Survey results announced by Statistics Korea on the 18th, domestic corporate sales amounted to 3,238 trillion won, an increase of 478 trillion won (17.4%) from the previous year (2,760 trillion won). Although sales increased, net profit decreased. Pre-tax net profit was 197.3 trillion won, down 25 trillion won from the previous year (222.3 trillion won). As sales increased and net profit decreased, the pre-tax net profit per 1,000 won of sales also fell by 19.7 won to 60.9 won from 80.6 won the previous year.

By industry, net profit decreased in manufacturing, information and communication, and professional scientific and technical services. In particular, pre-tax net profit in manufacturing decreased significantly by 2.26 trillion won. Pre-tax net profit in the information and communication industry also fell by 1.2535 trillion won. Net profit in the information and communication sector decreased by 259.3 billion won.

Statistics Korea explained that the background for the increase in sales but sharp decline in net profit was the poor performance of manufacturing, centered on semiconductors, over the past year. The rise in raw material prices and international oil prices due to the Russia-Ukraine war, along with rising interest rates, increased cost burdens and led to poor performance. Statistics Korea added, “There is also a base effect from the significant increase in pre-tax net profit of companies in 2021.”

The number of domestic companies surveyed in the Corporate Activity Survey was 13,825, a 2.8% increase from the previous year. Among them, 6,164 companies had subsidiaries, up 2.6% from a year earlier. This means 44.6% of the surveyed companies have subsidiaries domestically or abroad. Also, the number of employees in domestic companies was 4,981,000, up 1.3% from the previous year (4,917,000), but among them, regular employees numbered 4,334,000, increasing by only 29,000 (0.7%). Accordingly, the proportion of regular employees decreased by 0.6 percentage points to 87.0% from 87.6% the previous year. The number of regular employees per company was 313.5, down 6.6 from 320.1 the previous year.

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