S. Korean firms' profitability improves

South Korea's overall corporate profitability improved last year from a year earlier as overseas demand remained strong amid relatively low oil costs, the central bank said Wednesday. The average ratio of operating profit to sales, a key barometer of profitability, reached 5.9 percent last year, up from 5.2 percent a year earlier, the Bank of Korea (BOK) said in a report based on a survey of some 306,000 companies. The ratio of local companies' pre-tax net income to sales, another gauge of profitability, came in at 5.5 percent last year, also up from 4.4 percent the previous year, the BOK said. Local firms' indebtedness eased last year compared with the previous year, with their debt ratio falling to 114.8 percent from 123 percent over the cited period, it said. Exporters mostly fared better than domestic-focused firms, indicating that overall corporate growth was driven by bigger companies, according to the central bank. The BOK said exporters were more profitable and healthier than domestic-focused companies. The ratio of exporters' operating income to sales stood at 7.8 percent last year, up from 6.5 percent from a year earlier, it added.