The ability of South Korean listed companies to pay back their debts improved in the first half of this year due mainly to a rise in their operating profits and lower interest rates, data showed Wednesday.

The average interest coverage ratio of 571 firms listed on the main bourse came to 4.97 in the January-June period, compared with 4.13 tallied a year earlier, according to the data compiled by the Korea Exchange (KRX).

The ratio, or a firm's operating profit divided by its interest costs, measures the company's ability to pay interest on outstanding debt.

A reading higher than 1 means the firm earns more than it has to pay in interest, while a drop in the reading indicates the firm's debt-repayment ability has deteriorated.

The combined interest burden of the companies examined fell 9.31 percent on-year to 6.4 trillion won ($5.9 billion), while their operating profit gained 9.19 percent to 31.8 trillion won over the cited period.

A decline in market interest rates also helped reduce their debt-repaying burden. The Bank of Korea's benchmark seven-day repo rate came to 2.5 percent for June, down 0.75 percentage point from 3.25 percent tallied a year earlier.

The central bank's rate cut is part of efforts aimed at supporting the government's drive to stimulate the economy.

The number of companies with no interest costs stood at 43 in the first half, moving up from 35 tallied a year earlier, the KRX data showed. The tallied firms close their books in December. (Yonhap News)