Second-Quarter Corporate Operating Profit Margin Hits Record 16.9%; Samsung Electronics and SK hynix Account for Two-Thirds

[Financial News]  Companies’ sales and operating profit margins reached record highs in the second quarter of this year. The surge was driven by a sharp increase in semiconductor companies’ profits. In particular, Samsung Electronics and SK hynix together accounted for more than half of the overall sales growth rate among Korean companies and two-thirds of the increase in operating profit margins. This highlights the reality of the Korean economy’s excessive dependence on large semiconductor companies.
The Bank of Korea’s second-quarter corporate management analysis, released on the 9th, showed that the operating profit margin of 26,509 externally audited companies—13,218 manufacturers and 13,291 nonmanufacturers—was 16.9%, up 11.8 percentage points from a year earlier. It was the highest level since the statistics began in the first quarter of 2015. The figure also surpassed the previous record of 13.2% from the first quarter, just one quarter later.
However, excluding Samsung Electronics and SK hynix from the 16.9% operating profit margin recorded by all externally audited companies in the second quarter, the figure falls by 10.7 percentage points to just 6.2%.
By industry, the manufacturing operating profit margin surged 18.9 percentage points year on year to 24.0%. This was an all-time high, surpassing the previous record of 18.1% set in the first quarter.
Within manufacturing, the operating profit margin in machinery and electrical and electronic equipment jumped 35.6 percentage points to 43.0%, compared with 7.4% a year earlier.
The increase was driven by the semiconductor boom. Analysts say the “operating leverage effect” became fully apparent because the industry has a high proportion of fixed costs, allowing operating profit to expand more rapidly than sales. In fact, excluding Samsung Electronics and SK hynix, the manufacturing operating profit margin fell 16.8 percentage points to 7.2%.
In the petroleum and chemical industries, higher refining margins resulting from rising international oil prices lifted the operating profit margin to 9.5%, up 7 percentage points from 2.5% a year earlier.
By company size, both large companies and small and medium-sized companies saw increases, but the gap widened considerably.
Large companies’ operating profit margin rose 14 percentage points year on year to 19.1%, while that of small and medium-sized companies increased by just 0.3 percentage points to 5.3%.
The operating profit margin in nonmanufacturing was 5.0%, down 0.1 percentage points from a year earlier. This was due to a sharp decline in the transportation industry’s operating profit, from 7.0% to 4.8%, amid the impact of high oil prices and rising costs from using alternative shipping routes.
Sales also increased significantly.
The corporate sales growth rate in the second quarter was 26.7%, up 13.2 percentage points from 13.5% in the previous quarter. It was the highest level since the first quarter of 2015. The previous record was 24.9% in the fourth quarter of 2021.
Excluding Samsung Electronics and SK hynix, the sales growth rate for all externally audited companies falls by 14.7 percentage points to 12%.
Manufacturing sales rose 39.6%, centered on machinery and electrical and electronic equipment—nearly twice the previous quarter’s 21.1%. Excluding Samsung Electronics and SK hynix, the figure falls to one-third of that level, or 14%.
Nonmanufacturing sales increased 9.7% from the previous quarter’s 3.7%, led by transportation and wholesale and retail businesses.
Construction, which shifted from a 4.0% decline to a 0.3% increase, turned to modest growth for the first time in two years as construction orders for semiconductor plants expanded.
Lee Mi-joo, head of the BOK’s Corporate Statistics Team, said, "Even excluding Samsung Electronics and SK hynix, companies’ sales growth and operating profit margins are improving. Semiconductor conditions are expected to remain favorable in the second half of the year due to demand for artificial intelligence (AI) investment, but uncertainties such as the war in the Middle East need to be monitored."
The debt ratio and borrowing dependence ratio, which indicate corporate stability, stood at 84.5% and 22.8%, respectively, down from 87.0% and 23.9% in the previous quarter. The debt ratio was the lowest since the fourth quarter of 2018, when it stood at 81.3%, while the borrowing dependence ratio was the lowest since the third quarter of 2018, when it was 20.3%.
Unlike large companies, however, small and medium-sized companies saw their debt ratio rise from 103.0% to 112.1% and their borrowing dependence ratio increase from 30.7% to 31.1%.

[email protected] Jung Sang-gyun Reporter