The continued decline in semiconductor prices and a slowdown in the growth rate of automobile exports have led to a deterioration in the growth and profitability indicators of domestic companies in the third quarter from July to September.
According to the results of the “Q3 Corporate Management Analysis” released by the Bank of Korea on Dec. 12, the third-quarter sales of 22,962 corporate entities subject to external audits, including 11,604 in the manufacturing and 11,358 in the non-manufacturing industries, decreased by 5.2% compared to the same period last year.
Sales have declined for the second consecutive quarter since the second quarter compared to the previous quarter, with the decline rate being the largest in the second quarter of 2020, which was 10.1%.
In the manufacturing sector, the sales decline of 6.8% was comparable to the second quarter’s 6.9%. Meanwhile, the growth rate of non-manufacturing sector sales, which was -0.7% in the second quarter, widened its decline to -3.1% in the third quarter.
The operating profit margin as a percentage of revenue for all surveyed companies in the third quarter was 4.0%, showing a decrease compared to the same period last year, which recorded 4.8%. In terms of industry, the manufacturing sector’s operating profit margin dropped from 5.4% in the third quarter of the previous year to 4.0% in the third quarter of this year, representing a decline of 1.4 percentage points. On the other hand, the non-manufacturing sector experienced a slight increase from 4.0% to 4.1%.
The pre-tax net profit margin of 5.1% was similar to the third quarter of last year, which was 5.0%. Examining financial stability indicators, the third-quarter debt ratio for all companies at 90.2% was lower than the second quarter's 90.8%. The dependence on borrowed funds also improved slightly from 26.0% to 25.9%.