How did South Korean companies’ profitability and debt levels change in 2025?

The combined operating profit-to-sales ratio increased to 5.2 percent from 4.6 percent, its highest level since 2021. The average debt-to-equity ratio declined to 116.2 percent from 119.9 percent, its lowest level since 2019.

What happened to sales growth in South Korea’s manufacturing and non-manufacturing sectors in 2025?

Manufacturing sales growth slowed by 2.2 percentage points from the previous year, while non-manufacturing sales growth slowed by 0.6 percentage point. The BOK said strong performance in semiconductors, transportation and other industries supported companies’ results overall.

Why did the record share of South Korean firms with weak interest coverage matter, and what was the overall ratio?

An interest coverage ratio below 100 percent means a firm’s operating profit is less than its interest expenses. Although 42.9 percent of firms fell below that threshold, the overall ratio for all companies rose to 292.7 percent from 244.1 percent in 2024.

Corporate profits, debts improve in 2025: BOK

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Summary

South Korean companies improved profitability and reduced debt in 2025, supported by strong performance in semiconductors, transportation and other industries, while sales growth slowed. The Bank of Korea said sales grew 2.4 percent, down from 3.7 percent the previous year. The operating profit-to-sales ratio rose to 5.2 percent, and the average debt-to-equity ratio fell to 116.2 percent. However, the share of firms whose operating profits did not cover interest expenses reached a record high.

Key Facts

The Bank of Korea’s review covered about 983,000 non-financial firms subject to external audits.
Manufacturing sales grew 2.4 percent in 2025, compared with 4.6 percent the previous year.
Non-manufacturing sales advanced 2.3 percent, down from 2.9 percent the previous year.
The proportion of firms with an interest coverage ratio below 100 percent rose to 42.9 percent from 42.8 percent, the highest since the BOK began compiling the data in 2013.
The overall interest coverage ratio climbed to 292.7 percent in 2025 from 244.1 percent in 2024.

By Yonhap

Published Oct 21, 2026 12:20 pm KST

Office buildings in Seoul, May 5, 2025 / Yonhap

South Korean companies' profitability and debts improved last year, driven by strong performance in the semiconductor, transportation and other industries, although their sales growth slowed, central bank data showed Wednesday.

Corporate sales growth slowed to 2.4 percent last year from the previous year's 3.7 percent, according to the data from the Bank of Korea (BOK).

The data is based on a review of some 983,000 non-financial firms subject to external audits.

By sector, manufacturing businesses saw their sales grow by 2.4 percent in 2025, slowing from a 4.6 percent gain the previous year.

Sales in the non-manufacturing sector advanced 2.3 percent last year, also slowing from a 2.9 percent advance the previous year.

The ratio of local firms' combined operating profits to sales stood at 5.2 percent last year, improving from the previous year's 4.6 percent and the highest number since 2021.

The firms' average debt-to-equity ratio stood at 116.2 percent last year, down from 119.9 percent the previous year and the lowest since 2019, the latest findings showed.

The data also showed that the proportion of firms with an interest coverage ratio of less than 100 percent stood at 42.9 percent in last year, up from 42.8 percent a year earlier.

The figure marked the highest level since the BOK began compiling relevant data in 2013.

The interest coverage ratio is calculated by dividing operating profit by interest expenses.

The overall interest coverage ratio for all companies, meanwhile, climbed to 292.7 percent in 2025, up from 244.1 percent in 2024, according to the data.

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