SEOUL, Sept. 22 (Korea Bizwire) – South Korean companies suffered a setback in sales, but their profitability improved in the second quarter compared to a year earlier, central bank data showed Thursday.
Combined sales in local firms with assets worth over 12 billion won (US$10 million) fell 1.9 percent in the April-June period from a year earlier, showed a Bank of Korea survey conducted on 3,062 companies between Aug. 1 and Sept. 9.
Conglomerates saw their sales drop, though the rate of decline slowed to a 2.3 percent on-year drop in the second quarter from a 5.7-percent decrease in the year-ago period.
Small and medium-sized enterprises posted a 0.2 percent contraction in sales, compared with 2-percent expansion in the same period last year, the BOK said.
Exports posted the first on-year rise in 20 months in August on the back of brisk overseas demand for memory chips and flat panel displays. Outbound shipments came to US$40.1 billion last month, up 2.6 percent from a year earlier, it said.
Despite decreased sales, local companies posted an increase in their profitability.
The average operating profit margin of the surveyed companies came to 6.3 percent in the second quarter, up from 5.8 percent a year earlier.
The companies’ financial health slightly improved as their assets grew 0.6 percent in the second quarter from a quarter earlier, while their debt to equity ratio fell to 95 percent from 97.7 percent during the same period, it said.