Korean companies’ 1H revenue showed reverse growth in four years

Revenue of domestic companies in the first half of 2025 showed a decline for the first time since the pandemic in 2020. Corporate investment also declined for the first time in four years, reflecting the cooldown of the economy.

According to an analysis by the Federation of Korean Industries (FKI) on the business performance of 814 non-financial Korean corporations, which are required to submit business reports, overall sales increased by 6.7% compared to the same period last year. A closer look, however, revealed that the growth came mainly from increased sales by export companies (13.6%), while domestic companies' sales declined by 1.9% over the same period. Domestic companies refer to companies whose exports account for less than 50% of sales.

Based on domestic company sales, the export sector increased by 3.7%, while the domestic sector decreased by 2.4%. Domestic companies with reduced revenue include wholesale and retail (-6.5%), power, gas, steam and air conditioning supply (-5.5%). The slump in the wholesale and retail industry is seen to be due to slow domestic consumption.

Domestic companies were found to have a ‘recession-type surplus’ in which companies manage to turn their operating profits into surplus by reducing costs. The ratio of operating expenses to sales fell to 92.6%, the lowest since 2020.

The FKI described the performance of Korean export-driven companies as an ‘illusion’ due to their dependence on Samsung Electronics, which ranks first in revenue. Excluding Samsung Electronics, the sales growth rate of export companies goes down from 13.6% to 5.9%. “Revenue growth this year is partly due to the base effect from the previous year’s sales decline (-7.3%),” said the FKI.

Corporate investment in the first half of the year also decreased by 8.3% compared to the same period last year, raising concerns that the economy's growth engine is slowing. The investment growth rate of all companies increased by 16.9% in 2020 despite economic challenges from the pandemic, which suggests that investment has gone down further than four years ago.


박현익 기자 beepark@donga.com