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(LEAD) Corporate sales, profit growth slows in 2018

Economy 14:01 June 04, 2019

(ATTN: UPDATES with more details in last 2 paras; ADDS photo)

SEOUL, June 4 (Yonhap) -- Corporate sales and profit growth slowed last year in the face of the decelerating export growth, while corporate financial health improved on reduced borrowing, central bank data showed Tuesday.

In 2018, sales of non-financial companies here rose 4.2 percent, slowing from a 9.9 percent on-year increase in the year before, according to the data from the Bank of Korea (BOK).

The drop in sales was partly attributed to slowing growth in exports.

South Korea's outbound shipments expanded 5.5 percent on-year last year, slowing from a 15.8-percent spike the previous year.

The BOK report is based on a review of 24,539 non-financial firms that are subject to external audit. They include 10,872 manufacturing companies.

Sales of manufacturing firms grew 4.5 percent on-year in 2018, compared with a 9.8-percent increase the year before, while those of non-manufacturing companies slowed to a 3.8-percent increase from a 9.9-percent hike.

Their operating profits also slowed to a 6.9-percent gain from a 7.3-percent rise over the cited period.

The firms' fiscal soundness, on the other hand, improved as their debt ratio dropped from 95.7 percent in 2017 to 91.5 percent last year, with the ratio of their total borrowing to assets also slipping from 26.0 percent to 25.6 percent over the same period.

Their average cash flow coverage ratio dropped from 59.7 percent to 56.0 percent. The cash flow coverage ratio is an indicator of the ability to pay interest and principal amounts with earned cash.

The companies' cash interest coverage ratio also slipped from 839.0 percent to 766.1 percent over the cited period.

A container terminal at Busan Port on South Korea's southeastern coast is shown in this photo taken May 1, 2019. (Yonhap)

bdk@yna.co.kr
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