SEOUL, June 20 (Xinhua) -- South Korea's corporate capability to pay interest cost with operating profit worsened in 2018 on economic slowdown, a central bank report showed Thursday.
The average ratio of operating profit to interest cost among 21,213 companies subject to external audit came in at 5.9 last year, down from 6.3 in the previous year, according to the Bank of Korea (BOK).
It was attributed to the economic slump. Real gross domestic product (GDP), adjusted for inflation, grew 2.7 percent in 2018 from a year earlier, marking the lowest in six years.
Excluding the electrical and electronic sector that enjoyed a boom last year, the profit-to-interest ratio stood at 3.9 in 2018, recording the lowest in three years.
The portion of companies with the ratio below 1, which indicates the inability to pay interest cost with profit, came to 32.1 percent of the total last year, the highest since the BOK began compiling the data in 2010.
Among big corporations, 23.6 percent posted the profit-to-interest ratio below 1, lower than 34.0 percent for small companies.
More than half of shipbuilders saw the ratio below 1 last year. Carmakers and real estate developers with the ratio below 1 accounted for 37.8 percent and 42.7 percent each of the total.
The portion of companies, which recorded the profit-to-interest ratio below 1 for three straight years, reached 14.1 percent of the total in 2018, up 0.4 percentage points from the previous year.