Corporate Pre-tax Net Profit Sees Significant Decline in 2023

Last year, the pre-tax net profit of domestic companies, excluding the financial and insurance industries, experienced a sharp decline of 46.6 trillion won (23.6%) to 150.7 trillion won, compared to 197.3 trillion won in the previous year. This marks the second consecutive year of decline following a 11.2% drop in 2022, and the first time since 2019 that the decline has exceeded 20%.

The manufacturing sector saw the largest decline, with pre-tax net profit decreasing by 27.7% to 93.9 trillion won. A Statistics Korea official noted that pre-tax net profit decreased in most manufacturing sectors, excluding automobiles, such as semiconductors and petrochemicals.

Corporate sales also decreased by 1.1% from 3,238 trillion won in 2022 to 3,204 trillion won last year, with the transportation and warehousing sector seeing the largest sales decline at 12.2%.

Despite the overall decline, corporate research and development (R&D) expenses increased by 8.8% to 80 trillion won last year, and the number of companies involved in Fourth Industrial Revolution technologies rose by 35.9% to 2,665.