South Korean companies logged an on-year improvement in sales for the second quarter, but profitability dropped on the back of high commodity costs.

According to a Bank of Korea report released on Wednesday following a survey of three-thousand-148 companies, including two-thousand manufacturing firms, domestic companies' combined corporate sales increased by 20-point-five percent in the second quarter over last year.

The spike in sales was driven primarily by petroleum and chemical products, which jumped over 15 percent on-year, but the profit-to-sales ratio of the sector dropped over two percent in the same period.

Market-wide operating profit-to-sales for local firms also declined, albeit at a smaller margin of zero-point-three percentage points in the April-to-June period to come in at seven-point-one percent across all sectors.

The rise in commodity prices is primarily attributed to Russia's invasion of Ukraine and the subsequent trade sanctions imposed on Russia by Western powers.