Korean firms suffer extended slump in Q2

SEOUL, Sept. 17 (Yonhap) -- South Korean companies continued to suffer setbacks in their sales and profits in the second quarter amid slower economic growth and sluggish exports, central bank data showed Tuesday.

In the April-June period, the average sales of local companies shrank 1.1 percent from the same period last year, according to the data from the Bank of Korea (BOK).

The reading marks a slowdown from a 2.4-percent on-year drop posted in the first quarter.

The central bank did not offer any reasons for the continued decline, but the country's exports that have dropped for nine consecutive months since December may be a major reason for the slump.

BOK earlier said the country's exports plunged 9.9 percent on-year in the first six months of the year.

The South Korean economy grew 1 percent on-quarter in the second quarter following the unexpected on-quarter contraction of 0.4 percent in the previous quarter.

The overall sales of manufacturers dropped 1.7 percent on-year in the three months that ended June 30, while those of non-manufacturing businesses slipped 0.3 percent over the cited period.

The quarterly report is based on a survey of 3,764 businesses that include 1,799 listed firms, selected from a pool of nearly 20,000 that are subject to external audits. They consist of 2,301 manufacturing companies and 1,463 non-manufacturers.

The local companies' profitability also continued to worsen in the second quarter, despite a slower drop in their sales.

The operating profit of all businesses surveyed came to 5.2 percent of their sales, sharply down from 7.7 percent the same period last year and from 5.3 percent posted three months earlier.

The companies' debt ratio dropped to 83.5 percent in the second quarter from 86.7 percent three months earlier, according to the central bank.

bdk@yna.co.kr
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