Sales Growth Driven by Rubber, Plastics, and Wholesale and Retail Sectors
Operating Margin Declines in Real Estate and Information and Communications
Jeonnam Sees Weaker Growth but Improved Profitability and Stability
Last year, non-financial for-profit corporations in the Gwangju region saw improved growth compared to the previous year, but their profitability and stability deteriorated. In contrast, non-financial for-profit corporations in the Jeonnam region experienced a decline in growth, while their profitability and stability improved during the same period.
On December 24, the Gwangju-Jeonnam Branch of the Bank of Korea analyzed the management performance (growth, profitability, stability) of 63,755 non-financial for-profit corporations (10,729 in manufacturing and 53,026 in non-manufacturing) headquartered in the Gwangju and Jeonnam regions last year. The analysis found that the sales growth rate of companies in Gwangju was -1.3%, an increase of 1.4 percentage points from the previous year (-2.7%).
The growth in Gwangju was driven by an increase in the sales growth rate in manufacturing, particularly in rubber, plastics, and electrical equipment, as well as in non-manufacturing, especially business support services and wholesale and retail trade, leading to improvement compared to the previous year.
The operating margin, a key profitability indicator, was 3.5%, down 0.5 percentage points from the previous year's 3.9%, while the pre-tax net profit margin was 2.6%, a decrease of 0.6 percentage points from 3.2% the previous year. Although the operating margin in manufacturing, particularly in electrical equipment and rubber and plastics, increased, the operating margin in non-manufacturing, especially in information and communications and real estate, declined, resulting in an overall deterioration compared to the previous year.
The debt ratio, an indicator of stability, rose by 11.5 percentage points to 180.9% from 169.4% in the previous year, whereas the dependence on borrowings decreased by 1.7 percentage points to 38.9% from 40.7% the previous year.
For companies in the Jeonnam region, the sales growth rate was 4.6%, a decrease of 5.2 percentage points from 9.7% the previous year, and the total asset growth rate was 4.1%, down 3.2 percentage points from 7.3%. In Jeonnam, the sales growth rate in manufacturing, especially in chemicals and primary metals, increased, but in non-manufacturing, particularly in real estate and electricity and gas, it decreased, resulting in an overall decline compared to the previous year.
The operating margin was 3.5%, up 5.1 percentage points from -1.6% the previous year, and the pre-tax net profit margin was 2.3%, an increase of 3.3 percentage points from -1.0% the previous year.
The debt ratio fell by 4.9 percentage points to 262.1% from 267.0% the previous year, and the dependence on borrowings also decreased by 1.2 percentage points to 50.1% from 51.3% the previous year.
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