S. Korean Firms’ Q3 Sales Down on Low Oil Prices

Seoul, Combined sales of South Korean companies fell 4.8% in the third quarter from a year earlier due to prolonged low oil prices and the production halt of Samsung Electronics Co.’s Galaxy Note 7, central bank data showed Thursday.

The on-year sales growth rate for domestic companies, an indicator of a company’s growth, contracted for a 10th consecutive quarter since the second quarter of 2014.

The quarterly figure marked the lowest since the 6.3% contraction for the third quarter of 2003, South Korea’s News Agency (Yonhap) reported.

The Bank of Korea blamed low oil prices and Samsung’s decision to suspend the production of Galaxy Note 7 smartphone for the drop in the combined sales of South Korean companies in the third quarter ended Sept. 30.

Samsung later halted the production of the flagship smartphone after some of the smartphones caught fire.

Conglomerates said their sales dropped 5.2% in the third quarter from a 3.4% decrease in the year-ago period.

Small and medium-sized enterprises posted a 3.2% contraction in sales, compared with 6.5% expansion in the same period last year, the BOK said.

The BOK said companies’ operating profit margin to sales remained unchanged at 5.7% in the third quarter from a year earlier. It means that companies earned 57 won when they sold a product worth 1,000 won (US84 cents).

The companies’ financial health slightly improved as their assets grew 0.1% in the third quarter from a quarter earlier, while their debt to equity ratio fell to 91.8% from 94.6% during the same period, it said.

The BOK said its survey was conducted on 3,062 companies between Nov. 1 and Dec. 2.

Source: Qatar News Agency