South Korean firms see higher profit margins and lower debt as sales growth eases

Bank of Korea statistics covering about 983,000 audited non-financial firms indicate that South Korean corporate sales expanded 2.4% in 2025, a slowdown from the 3.7% increase the previous year. Operating profit as a share of sales rose to 5.2%, the highest level since 2021, reflecting strong performance in semiconductors, transportation and other industries. The average debt-to-equity ratio dropped to 116.2%, the lowest figure since 2019, signalling healthier balance sheets.

The share of companies with an interest-coverage ratio below 100% rose slightly to 42.9%, the highest point since the BOK began tracking the metric in 2013. Conversely, the aggregate interest-coverage ratio improved to 292.7% in 2025 from 244.1% in 2024. These mixed trends suggest better profitability and lower leverage despite a deceleration in sales growth.