South Korea's corporate earnings hit an all-time high in 2016 on decreased costs amid falling household income stemming from a sluggish job market and anemic domestic demand, government data showed Monday.
The combined net profit of local companies, excluding financial firms, came to 116.1 trillion won ($104 billion) last year, up 20 percent from the previous year, according to the data from the National Tax Service.
It was the largest amount since 2005, when the NTS began to compile related data, and marked the second time that it has exceeded the 100 trillion won mark. In 2011, the figure stood at 110.9 trillion won.
The surge in their bottom line caused local corporate income taxes to reach a record high as well last year. Nonfinancial companies paid a combined 40.7 trillion won in taxes in 2016, up 24 percent from the previous year.
The tax office said local companies chalked up record earnings last year due mainly to falling oil prices and the country's low interest rates, rather than increased sales.
The combined sales of nonfinancial companies fell to 3,756.7 trillion won last year from 3,773.1 trillion won a year earlier, with their total cost of goods sold dropping 3 percent on-year to 2,917.1 trillion won.
"Prolonged low rates enabled local companies to raise cheap money and low crude prices helped them cut down on costs," an NTS official said. "Their productivity also got a boost from a series of restructuring moves."
In contrast to the jump in corporate income, the country's real monthly household income decreased 0.4 percent in 2016 from a year earlier, the first on-year decline in seven years, due to a cold job market and flaccid domestic demand, according to the data. (Yonhap)