Revenue of South Korean big companies posts largest fall in 12 years

Revenue among South Korean big companies posted the largest quarterly decline in 12 years due to sluggish exports and cheaper oil, central bank data showed Thursday.

Average sales fell 4.7 percent in the first quarter from a year earlier, according to the Bank of Korea (BOK). It was based the bank's sample survey of 3,065 firms among some 16,000 big companies subject to external audit.

The first-quarter figure was the fastest decline in about 12 years since the third quarter of 2003 when the revenue tumbled 6.3 percent due to the negative effect from the country's credit card crisis.

Cheaper crude oil dragged down prices of oil and petrochemical products, leading to a fall in revenue for related exporters. Shipments of smartphones and autos reduced during the quarter due to weak global demand and the deprecating Japanese yen.

Revenue among manufacturers slid 5.7 percent on-year in the first quarter, with the figure for non-manufacturers falling 3.2 percent.

Sales in petrochemical companies plunged 20.7 percent during the quarter, contributing mainly to the decline in overall revenue of big companies. Revenue in metal manufacturers reduced 7.1 percent on steel oversupply.

Lower commodity prices, which caused a fall in revenue, led to an improved profitability as it pulled down costs of production.

The ratio of operating profit to revenue was 5.1 percent in the first quarter, up 0.4 percentage points from a year earlier.

The ratio for large companies rose to 5.1 percent in the first quarter from 4.6 percent a year earlier, but the rate for small companies declined from 5 percent to 4.7 percent in the cited period.