[Edaily Reporter Kim Kook Bae ] Driven by the semiconductor boom, both growth and profitability among South Korean companies reached record highs in the second quarter. However, excluding Samsung Electronics and SK Hynix, the extent of the improvement in earnings was significantly smaller. There were limitations to viewing the positive momentum from the semiconductor sector as having spread across all companies, including those in domestic demand-driven industries.

According to the “Second-Quarter Corporate Business Analysis Results” released by the Bank of Korea on the 9th, the revenue growth rate of domestic companies in the second quarter was recorded at 26.7%, a significant increase from the previous quarter (13.5%). This surpassed the previous record high set in the fourth quarter of 2021 (24.9%). These results were compiled from a sample survey of 4,260 out of 26,509 corporations subject to statutory external audits.

In particular, the performance of the manufacturing sector, which is heavily influenced by strong semiconductor exports, stood out. The manufacturing sector’s revenue growth rate rose sharply to 39.6% from 21.1% in the first quarter. Within this sector, revenue growth in machinery and electrical/electronics surged from 52.1% in the previous quarter to 88.5%, while growth in electronic, video, and telecommunications equipment jumped from 75.7% to 119.7%, driving the overall increase in manufacturing revenue.

Profitability indicators also improved. The operating profit margin for companies in the second quarter was 16.9%, up from 5.1% in the same period last year. This surpassed the record high (13.2%) set in the first quarter in just one quarter.

However, excluding Samsung Electronics and SK Hynix, the picture was quite different. Excluding these two companies, the revenue growth rate for domestic firms fell by 14.7 percentage points to 12%. The overall operating profit margin also dropped from 16.9% to 6.2%, falling to less than half the previous level.

This trend was even more pronounced in the manufacturing sector. While the overall operating profit margin for the manufacturing sector rose from 5.1% in the second quarter of last year to 24% in the second quarter of this year, the margin excluding Samsung Electronics and SK Hynix fell to 7.2%. This is not significantly different from the 5% operating profit margin in the non-manufacturing sector. This indicates that the improved performance of certain large conglomerates, particularly those in the semiconductor sector, played a significant role in boosting the overall profitability of the manufacturing sector.

There were also significant differences by company size. While the revenue growth rate for large corporations rose from 16% in the second quarter of last year to 30.5% in the second quarter of this year, that of small and medium-sized enterprises (SMEs) increased only from 2.4% to 10.2%.

The debt-to-equity ratio fell from 87% in the first quarter to 84.5% in the second quarter, marking the lowest level since the fourth quarter of 2018 (81.3%). However, when broken down by size, while the debt-to-equity ratio for large corporations decreased from 83.8% in the first quarter to 79.8%, that of small and medium-sized enterprises rose from 103% to 112.1%.

Dependence on borrowed funds also fell from 23.9% in the first quarter to 22.8% in the second quarter, reaching its lowest level since the fourth quarter of 2018 (20.3%). However, while this ratio decreased from 22.4% to 21.2% for large enterprises, it rose from 30.7% to 31.1% for small and medium-sized enterprises. This was driven by increased demand for funds in certain sectors, such as wholesale and retail, lodging, and food services.

The Bank of Korea explained that growth and profitability in the non-manufacturing sector are also improving. In fact, the sales growth rate for the non-manufacturing sector rose to 9.7%, driven primarily by the service industry. In the construction sector, the sales growth rate (0.3%) turned positive for the first time in eight quarters, driven by an expansion in construction projects for semiconductor factories. However, the operating profit margin for the non-manufacturing sector fell by 0.1 percentage points, from 5.1% in the second quarter of last year to 5.0% in the second quarter of this year. Lee Mi-ju, head of the BOK’s Corporate Statistics Team, stated, “The sales growth rate in the non-manufacturing sector is not low either,” adding, “(The manufacturing and non-manufacturing sectors) are moving in a somewhat similar direction.”

With the favorable conditions in the semiconductor sector expected to continue in the second half of the year, the trend of improving earnings—led by semiconductor companies—is projected to persist. Team Leader Lee said, “Based on robust demand for AI investment, favorable conditions in the semiconductor sector are expected to continue, and domestic demand is also expected to recover,” adding, “However, given that external uncertainties—such as the unfolding situation in the Middle East and U.S. tariff policies—remain high, we need to monitor future developments closely.”