Business · Economy · 3 hrs ago
South Korean corporate profits rise as small firms struggle to cover interest
The Bank of Korea said South Korean companies’ operating-profit margin rose to 5.2% in 2025, the highest level in four years.
The improvement was driven mainly by large manufacturers, as booming semiconductor and shipbuilding businesses lifted big firms’ profits.
Large companies’ margin climbed to 6.7%, while the margin for small and medium-sized firms fell to 2.8%.
A record 42.9% of companies could not cover interest costs with their operating profits, the highest share since comparable records began in 2009.
A ratio below 100% means a company earns less from operations than it owes in interest.
The figures show that stronger overall profits have not reached all businesses, leaving many companies under financial strain.
The data covers 2025; the figures do not specify any next policy step.
South Korean companies’ operating profit margin rose to 5.2% in 2025, its highest level in four years.
The share of companies unable to cover interest costs with operating profit also reached a record 42.9%.
Large companies’ margins improved, while small and medium-sized firms’ margins fell to 2.8%.
Strong semiconductor and shipbuilding performance helped lift manufacturing profitability.
The Bank of Korea said the improvement in profitability was more concentrated among large companies.
- Who
- South Korean non-financial, for-profit companies, including large companies and small and medium-sized firms.
- What
- Overall operating profitability improved, but the share of companies unable to cover interest costs also reached a record.
- When
- The figures cover 2025. The Bank of Korea released the results on the 21st.
- Where
- South Korea.
- Why
- Semiconductor and shipbuilding strength helped large companies, while profitability at small and medium-sized firms declined.
This story does not have two clearly opposing sides.
South Korean companies recorded a 5.2% operating profit margin, while small and medium-sized firms’ margin fell to 2.8%.
The Bank of Korea released its 2025 annual corporate management analysis results.
- Overall operating profit margin
- 5.2% in 2025, up from 4.6% in 2024
- Large-company operating profit margin
- 6.7% in 2025, up from 5.6% in 2024
- Small and medium-sized firms’ operating profit margin
- 2.8% in 2025, down from 3.0% in 2024
- Companies below 100% interest coverage
- 42.9% in 2025, the highest share since comparable statistics began in 2009
- Manufacturing operating profit margin
- 6.3% in 2025, up from 5.1% in 2024
- Non-financial, for-profit firms covered
- 982,767
What people are saying
Overall, improvements in profitability indicators appear to have been more concentrated among large companies.