SEOUL, - South Korean companies' sales growth slowed and their profitability also weakened last year, central bank data showed Wednesday, as higher borrowing costs and increased prices of raw materials ate into their bottom line.
Corporate sales increased 15.1 percent last year from a year earlier, slowing from the 17 percent gain the previous year, according to the data from the Bank of Korea (BOK).
The data is based on a review of some 910,000 companies that are subject to external audits.
With a slowdown in their sales, the firms' profitability also weakened.
Their operating profit to sales ratio stood at 4.5 percent last year, compared with 5.6 percent the previous year, while their net profit to sales also slowed from 6.5 percent to 4.6 percent over the cited period.
The slowdown in sales growth and profitability came amid higher borrowing costs and increased prices of raw materials, such as oil.
The central bank held its key interest rate steady at 3.5 percent for the six straight time this month, after having delivered seven consecutive hikes in borrowing costs since April last year.
By sector, manufacturing businesses saw their sales growth slow to 14.6 percent from 18.1 percent over the cited period, according to the BOK.
And sales in the nonmanufacturing sector grew 15.4 percent last year, slowing from the previous year's 16.2 percent.
The firms' average debt-to-equity ratio came to 122.3 percent last year, up from 120.3 percent the previous year, the data showed.
Source: Yonhap News Agency