Fifty-two major companies in South Korea were found to be unable to cover their interest payments with their operating profits as of the third quarter of this year. This data comes from CEO Score, a corporate data research institute, which examined the operating profits and interest expenses of 271 companies that submitted quarterly reports out of the top 500 companies in the country.
The number of companies with an interest coverage ratio below 1, meaning they are struggling to pay interest using their operating profits, increased by eight from the previous year to a total of 52. Among these, 29 companies registered operating losses, including LG Display, SK On, Hanwha Solutions, Hotel Lotte, and Lotte Chemical.
Furthermore, 16 companies, including LG Display, SK On, and Lotte Shopping, have reported an interest coverage ratio below 1 for three consecutive years.
The overall interest coverage ratio of the surveyed companies increased from 3.01 in the third quarter of last year to 4.97 this year. However, excluding companies that saw a significant increase in operating profit, such as SK Hynix, Samsung Electronics, and Korea Electric Power Corporation, the interest coverage ratio for the remaining companies decreased from 4.34 to 3.98.
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