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Listed firms' debt ratio inches up in H1

Economy 08:52 August 26, 2019

SEOUL, Aug. 26 (Yonhap) -- South Korea's listed companies saw their financial health worsen slightly in the first half of the year amid an earnings fall, data showed Monday.

The average debt-to-equity ratio of 636 firms listed on the main KOSPI market reached 108.75 percent as of end-June, up 4.44 percentage points from the end of last year, according to the data by the Korea Exchange and the Korea Listed Companies Association.

The ratio for nonmanufacturing firms rose 12.1 percentage points to 152.6 percent, while that for manufacturers gained 1.5 percentage points to 92.2 percent.

A key barometer of financial soundness, the ratio is calculated by dividing a company's total liabilities by its stockholders' equity.

The bourse operator and the association didn't provide the reason for the worsened debt-equity ratio of the companies that close their books in December.

But the drop came amid their falling profits. According to separate data from the two institutions, 574 nonfinancial firms posted a combined net profit of 37.5 trillion won (US$31 billion) in the January-June period, down nearly 43 percent from a year ago.

As of end-June, the 636 firms' debt totaled 1,354.07 trillion won, up 7.3 percent from six months earlier, with their combined equity rising 2.9 percent to 1,245.08 trillion won.

According to the data, 54.1 percent of the total, or 344 firms, had a debt ratio of 100 percent or lower, while the ratio for 17.3 percent, or 110 companies, exceeded 200 percent. The remainder had an in-between ratio.

Listed firms' debt ratio inches up in H1 - 1


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