SEOUL, April 30 (Korea Bizwire) — South Korean public firms’ liabilities rose for the fourth straight year last year to hit another record high as they borrowed more to make investments amid the economic recovery, the finance ministry said Friday.
Of 350 state-run companies, the combined debt of 347 firms reached 583 trillion won (US$463.4 billion) at the end of last year, up 41.8 trillion won from the previous year, according to the Ministry of Economy and Finance.
It marked the highest liabilities since 2005, when the government began compiling related data.
The debt held by the Korea Electric Power Corp. (KEPCO), the country’s power monopoly, increased the most amid high oil prices. KEPCO’s liabilities grew 13.3 trillion won on-year to 145.8 trillion won last year.
Despite the rise in debt, their debt ratio, a key gauge of financial soundness, improved last year as capital grew at a faster pace than debt mainly due to better earnings, the ministry said.
The public firms saw their combined profit more than double last year, despite a hefty net loss by KEPCO.
Net income came to 10.8 trillion won last year, up 107.7 percent from a year earlier.
Their combined assets increased 71.4 trillion won on-year to 969 trillion won.
Meanwhile, the public firms reduced hirings of new employees for the second straight year in 2021.
A total of 350 public companies newly employed 27,053 people last year, down 12 percent from a year earlier.
Hit by the COVID-19 pandemic, public firms curtailed new hirings in 2020 for the first time since 2009. New hirings had grown for the 10th straight year in 2019.