South Korean public firms' liabilities rose for the third straight year last year to hit a record high as they increased investment amid the pandemic, the finance ministry said Friday.

Of 350 state-run companies, the combined debt of 347 firms reached 544.8 trillion won ($491.5 billion) at the end of last year, up 17.9 trillion won from the previous year, according to the Ministry of Economy and Finance.

It marked the highest total for liabilities since 2005 when the government began compiling related data.

Their combined assets grew 41.6 trillion won on-year to 902.4 trillion won.

Despite the continued rise in liabilities, their financial soundness improved last year as capital grew at a faster pace than debt on improving earnings, the ministry said.

The debt-to-capital ratio, a key gauge of financial soundness, came to 152.4 percent last year, down 5.4 percentage points from a year earlier.

The public firms posted a combined net profit of 5.3 trillion won last year, up 4.5 trillion won from 2019 as major firms, including the Korea Electric Power Corp. (Kepco), the country's power monopoly, logged improved earnings.

Meanwhile, the public firms reduced hiring of new employees for the first time in 11 years in 2020 amid the pandemic.

A total of 350 public companies newly employed 31,000 people last year, down 10,000 from the previous year.

It marked the first time that they curtailed new hiring since 2009 when the country was in the midst of the global financial crisis. (Yonhap)