Record 2nd Quarter

Samsung Electronics registers 29.1 tln won in sales for 2Q, up 12 pct


Samsung Electronics Co. had the best second quarter in its history with key sectors performing extremely well, although the company was unable to sidestep a global economic downtrend brought on by sky-high oil prices.
The nation's largest electronics maker announced in its investor relations session that it recorded second quarter sales of 18.14 trillion won, up 6 percent from the same period last year, operating profit at 260 billion won, down 12 percent, and net income of 50 billion won, down 2 percent.
The company's superior sales for the quarter brought total H1 sales on a consolidated basis to 55.11 trillion won and operating profit of 1.89 trillion won.
The sales increase is owed to the depreciation of the Korean currency vis-a-vis the U.S. dollar, but its operating profit and net income shrank due to the lack of strong leadership at the top management level and an inability to cope with various adverse economic conditions in the overseas markets, industry analysts said.
The company's consolidated financial statement showed that its total sales including those made by its overseas subsidiaries rose 12 percent to 29.1 trillion won, but operating profit was down 7 percent to 2.4 trillion won in the second quarter.
The semiconductor sector's consolidated sales reached 5.24 trillion won, due to its competitive edge in prices, compared to 4.58 trillion won in sales recorded by the home office, while operating profit amounted to 300 billion won, or 270 billion won on a non-consolidated basis.
Vice President Choo Woo-shik, in charge of investor relations for the company, said the company has set aside 12 trillion won for facilities investments in its key production sectors this year -- 7 trillion won alone for the memory chip production facilities and 4 trillion won for the LCD sector -- in order for the company to maintain its lead over rival companies around the world in the days ahead.
The LCD sector's sales came to 3.94 trillion won on a consolidated basis, up 11 percent from the previous quarter, helped by the sale of 25.4 million sheets of large LCD panels, with operating profit amounting to 1.05 trillion won.
The numbers are encouraging as they came during the off-season for the product, company officials said, adding that LCD panels will continue to do well in the second half, too, with those used in TVs selling over 5 million sheets in the second quarter, thanks to the rising demand on the part of the TV makers around the world. The company's market share in the U.S. TV market is projected to rise to the upper 20 percent level this year as a whole.
The communication equipment sector also did well by meeting its goals for the quarter, despite sluggish demand and increased marketing expenses. Its consolidated sales reached 7.87 trillion won, with operating profit totaling 890 billion won. The encouraging figure is owed to the introduction of a premium new product with an increased unit price of $143 in the second quarter from $141 in the first quarter.
The company is positive about achieving its target of selling 200 million sets of communication equipment and double-digit net profit for the year.
The digital sector also achieved sales of 10.33 trillion won in the second quarter helped by high sales of LCD TVs, with operating profit amounting to 140 billion won. The company projects LCD TV sales will continue to keep pace in the second half with the introduction of a slew of new Bordeaux TV models, expanding its lead over rival companies. nw

Vice Chairman Lee Yoon-woo of Samsung Electronics Co.