South Korean companies saw revenue plunge by more than 10 percent in the second quarter from a year ago, marking the steepest fall in five years amid virus pandemic.

According to data released by the Bank of Korea on Tuesday, sales of non-financial companies dropped 10.1 percent in the second quarter from the same period last year. It is the sixth consecutive quarterly loss, accelerated from a 1.9 percent drop in the first quarter.

It is the first time for sales to plunge over 10 percent year over year since the central bank began compiling quarterly data in the first quarter of 2015.

In the manufacturing sector, sales plunged 12.7 percent on year in the April-June period, worsening from a 1.9 percent fall in the first quarter. In the non-manufacturing sector, sales fell 6.5 percent compared with a 1.9 percent drop in the first quarter.

Sales of companies in petrochemical sector plunged 26.8 percent in the second quarter compared with 5.2 percent in the first quarter due to falling international oil prices while companies in transportation equipment industry saw revenue fall 17.3 percent in the second quarter, worsening from 3.5 percent fall in the first quarter. The drop was mainly due to sluggish demand for automobiles.

Total assets rose by 1.1 percent in the second quarter from the end of the first quarter – which is higher than 0.2 percent growth in the same period last year.

Big companies issued more corporate debt this year than last year, raising total assets that include debt, the BOK said.

The operating income to sales ratio stood at 5.3 percent in the second quarter, lower than 5.5 percent in the same period last year. The ratio fell from 5.2 percent to 5.1 percent for large companies and from 6.8 percent to 6.1 percent for small- and mid-size companies.

The ratio for companies in the manufacturing sector fell from 5.7 percent to 5.3 percent while those in non-manufacturing sector rose from 5.2 percent to 5.3 percent as conditions improved in transportation industry amid a rise in international freight fare.

Income before taxes to sales ratio, another measurement for profitability, fell from 5.4 percent in the second quarter last year to 5.2 percent this year, data showed.

Debt to equity ratio stood at 87 percent in the April-June period, decreasing from 88.2 percent in the previous three-month period. Bonds payable to total assets ratio increased from 25.3 percent to 25.6 percent during the same period.

The data is based on a survey of 3,862 corporations conducted between July 27 and August 28.

By Lee Eun-joo

[ⓒ Pulse by Maeil Business Newspaper & mk.co.kr, All rights reserved]