Consolidated Revenues of 32.51 trillion won, Operating Profit of 2.52 trillion won.
SEOUL, Korea: Samsung Electronics Co., Ltd. announced revenues of 32.51 trillion Korean won on a consolidated basis for the second quarter ended June 30, 2009, an 11.7 percent increase year-on-year.
Consolidated operating profit for the quarter was 2.52 trillion won, a 5.0 percent increase year-on-year and up 436 percent from the previous quarter. Income before income taxes reached 2.86 trillion won on a consolidated basis. Net income, available on a parent basis only, was 2.25 trillion won.
Samsung also announced it will adopt the International Financial Reporting Standards from the first quarter of 2010.
Despite continued uncertainty in the global market, Samsung achieved strong revenue growth and profit across both major business units – Device Solutions and Digital Media & Communications. The sustained recovery was supported by renewed demand for premium consumer electronics and improved pricing for memory semiconductors and LCD panels.
“Samsung achieved outstanding results in the second quarter with our consumer electronics business remaining strong and a solid performance in the still challenging components market,” said Robert Yi, Vice President and head of Samsung Electronics’ Investor Relations Team.
“That said, we maintain a cautious view looking ahead to the remainder of 2009 as operating profit may be affected by a possible appreciation of the Korean won and intensifying market competition. We will continue to reinforce our technological edge while seeking greater efficiency in order to maintain our market leadership position,” he said.
Semiconductor Demand Recovering
Samsung’s Semiconductor divisions recorded a consolidated basis operating profit of 240 billion won. Revenue reached 6.14 trillion won, a 7.2 percent increase year-on-year.
Despite weak seasonality, Samsung saw its operating performance improve from the previous quarter as the market price for DRAM rose due to flat supply and strong PC sales generating increased demand. NAND prices also rose, driven by demand from makers of smart phones and portable media players. The System LSI Division achieved an improved operating profit as steady demand led to a reduction of inventory.
Samsung forecast a continued improvement in demand for Memory, but cautioned that increased supply across the market could have a dampening effect on prices. The company said it will maintain its market leadership by continuing technological migration to higher density DRAM and NAND products.
LCD Division Returns to Black
The LCD Division recorded an operating profit of 150 billion won as revenue reached 5.10 trillion won, an 8.1 percent decline year-on-year.
Samsung rebounded from an operating loss in the first quarter as increased demand for LCD panels boosted unit sales by more than 30 percent quarter-on-quarter. However, shortages of glass across the industry had a limiting effect on supply.
LCD panel prices increased for notebook computers (up 4 percent), TVs smaller than 32 inches (up 9 percent) and monitors (up 12 percent). The division saw strong sales for new product lines including wide format, LED and netbook display panels. The start of mass production at S-LCD Corporation’s 8-2 production line enabled the division to respond to increased demand for TV panels.
Samsung forecast continuing strong demand for LCD panels in the third quarter, when seasonal demand is typically at its highest. However, it said reduced demand in the final quarter could result in a decline in prices.
Mobile Handset Unit Sales Up 14 Percent
Samsung’s Telecommunications divisions registered an operating profit of 1.00 trillion won, maintaining a 10 percent margin. Revenue reached 10.04 trillion won, a 27.4 percent increase year-on-year.
Samsung’s sales of mobile handsets increased 14 percent quarter-on-quarter to 52.3 million units in the three month period. The company continued to outperform the market with strong sales in Europe and North America. The average sales price for Samsung handsets increased 2 percent, supported by increased demand for touch screen and high-end devices.
The Telecommunication Systems Division performed strongly as it continued to secure Mobile WiMAX technology provision contracts in Europe, US and Asia.
Samsung estimated that handset demand would increase 5 percent in the third quarter, helped by increased marketing promotions by carriers in advanced markets and the expansion of 3G service in China. The company expected to continue to gain market share by expanding its product line up and through close partnerships with mobile service providers. Samsung forecast it would exceed its full year sales target of 200 million units and said flagship models including the new Jet and Omnia series devices had received a positive market reception.
Outperforms in Flat Panel TV Market
Samsung’s Digital Media divisions registered an operating profit of 1.06 trillion won, up 657 percent increase year-on-year. Revenue reached 11.77 trillion won, a 13.8 percent increase year-on-year. The performance was driven by strong sales of flat panel TVs and premium digital appliances.
In flat panel TVs, Samsung saw unit sales increase by 10 percent, outperforming the 6 percent overall market growth. Samsung’s new line of LED TVs drew strong interest from consumers, with 500,000 units sold during the three month period. The company maintained market leadership in monitors, increasing its share in models larger than 20 inches.
In digital appliances, Samsung achieved sales growth of more than 20 percent with premium product offerings performing well.
Samsung forecast the overall demand for TVs to grow in the 10-20 percent range but expected strong price competition as major manufacturers launched new product lineups. The company aimed to outperform the market by offering new models and focusing on LED, Full HD and premium design models. The Digital Appliance Division will offer new eco-friendly models with energy saving features to maintain market growth.
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