[Edaily Reporter Kim Kook Bae ] Last year, the operating profit margin of domestic companies rose to its highest level in four years, but the profitability gap between large corporations and small and medium-sized enterprises (SMEs) actually widened. The gap in operating profit margins between large and small and medium-sized enterprises (SMEs) widened from 2.6 percentage points to 3.9 percentage points over the past year. While the profitability of large corporations improved significantly, driven by stronger performance in sectors such as semiconductors and shipbuilding, that of SMEs deteriorated. The proportion of companies unable to cover even their interest payments with operating profit also rose slightly, reaching a record high.

According to the “2025 Annual Corporate Management Analysis Results” released by the Bank of Korea on the 21st, the operating profit margin—which indicates the profitability of domestic non-financial for-profit corporations—stood at 5.2% last year, up 0.6 percentage points from the previous year (4.6%). This is the highest level since 2021 (5.6%).

By company size, the operating profit margin for large corporations rose by 1.1 percentage points, from 5.6% in 2024 to 6.7% last year. In contrast, that of small and medium-sized enterprises (SMEs) fell by 0.2 percentage points, from 3.0% to 2.8%. Among SMEs, the margin for medium-sized enterprises dropped from 3.9% to 3.8%, while that for small enterprises fell from 1.8% to 1.5%.

The improvement in profitability was concentrated among large enterprises, largely due to strong performance in the semiconductor and shipbuilding industries. The operating profit margin for the electronics, audiovisual, and telecommunications equipment sector—which includes semiconductors—rose by 5.7 percentage points, from 8.3% in 2024 to 14.0% last year. This was driven by increased sales of high-value-added semiconductor products and rising semiconductor prices. The shipbuilding and other transportation equipment sector also saw its operating profit margin rise from 6.4% to 11.6%, driven by expanded sales of high-value-added vessels and reduced cost pressures. As a result, the manufacturing sector’s operating profit margin rose from 5.1% to 6.3%.

Kim Dan-bi, Section Chief of the Corporate Statistics Team in the Bank of Korea’s Economic Statistics Division 1, explained, “We believe the factors driving the improvement in profitability in 2025 stem from major conglomerate-dominated industries,” adding, “In particular, the semiconductor and shipbuilding industries are dominated by large conglomerates.”

The interest coverage ratio for all companies also rose from 244.1% in 2024 to 292.7% last year; however, the proportion of companies unable to cover interest expenses with operating profit actually increased. The proportion of companies with an interest coverage ratio below 100% rose by 0.1 percentage points from 42.8% to 42.9%, reaching its highest level since 2009, when these statistics were first compiled. In particular, the proportion of companies with an interest coverage ratio below 0%—which recorded operating losses—increased from 33.9% to 34.4%. The proportion of companies by interest coverage ratio range was calculated based on 477,810 companies, excluding those with no interest expenses.

Growth also slowed. Last year’s revenue growth rate was 2.4%, down 1.3 percentage points from the previous year (3.7%). Both large corporations (down from 3.4% to 2.0%) and small and medium-sized enterprises (SMEs) (down from 4.1% to 3.0%) saw declines. The debt-to-equity ratio for all companies fell from 119.9% to 116.2%, marking the lowest level since 2019. While the ratio declined for both large enterprises (101.5% → 99.6%) and small and medium-sized enterprises (162.7% → 155.2%), it rose for mid-sized enterprises (90.3% → 93.8%).