Always Blue Sky

There's No Off-season for Samsung Products

Samsung Electronics sets record performance results in Q2 with all sectors experiencing a boom in sales and profits. Samsung Electronics Co. had record Q2 results with consolidated sales revenue reaching 32.51 trillion won, up 12 percent YoY and 13 percent from the preceding quarter, with operating profit of 2.52 trillion won, up 5 percent YoY, the company said on July 24.
Such critical sectors as semiconductor memory chips, LCD panels, IT, cell phones, LED TV, LCD TV and other digital media products for the company all turned in positive numbers for Q2. The IT sector turned in the best record with over 1 trillion won in operating profit along with the digital media sector, which for the first time saw its operating profit exceed the 1 trillion won level on a consolidated basis, playing its usual role as a cash cow for the company. The semiconductor and LCD sectors also made profits, despite Q2 traditionally being an off-season for the products.
The rapid increase in sales and the prices of D-RAM chips played a key role in bringing profits to the sector in the quarter with quarterly sales coming in at 6.14 trillion won. The cost competitiveness and segregated product sales led the sector to expand its Q2 sales, the company said. The company plans to sell one of its passenger jets and reduce ads in sporting events not related directly to product sales by 30 percent and continue such efforts through 2010, the company said.
Chip sales rose 18 percent from the previous quarter and profit amounted to 240 billion won, erasing the deficit in Q1.
Sales of LCDs increased substantially despite the quarter being an off-season, owing mostly to a hefty increase in the sale of panels, especially in China and other emerging markets, coupled with a price rise, new products including cell phones, LED TVs, LCD TVs and others, helping the company increase sales to 5.1 trillion won, up more than 1 trillion won compared to the previous quarter, and operating profit at 150 billion won.
IT sector sales reached 10.04 trillion won, up 3 percent from the preceding quarter led by the sale of touchscreen handsets, especially in the emerging market countries where the company conducted a strong publicity campaign for the products to expand sales by more than 14 percent. Operating profit in those markets rose 179 percent to 1.06 trillion won led by an increase in sales of such leading products as monitors, printers and home appliances, pushing the company's market share to the 20 percent level with operating profit kept in double-digit levels.
In the digital media sector, the marketing programs focused on such premium products as LED TVs and LCD TVs have paid off, boosting the market shares of those products around the world with monitors, printers and electronic home appliances selling better than expected, bringing the sector's Q2 sales up 17 percent from the preceding quarter at 11.77 trillion won.
The sector's operating profit jumped 179 percent from the previous quarter to 1.06 trillion won thanks to the sales increase of such high value-added products as LCD TVs and LED TVs, finding its new market to record its highest quarterly TV sales.
Samsung Electronics is very much concerned with the flexible management of its investment designed to strengthen its market leadership and expand its competitive power dependent on market situations.
The company will use a new accounting system as approved by its board of directors on July 24, which is based on the International Financial Recording System (IFRS) from 2010, instead of 2011 as originally planned. The company will announce its Q1 2010 performance record based on a consolidated financial statement as per international practice covering its entire global operations, not based on the home office-based performance records.
The decision is due to the company's need to strengthen its leading role as a global enterprise more positively and to let the investors always be aware of the company's financial conditions to the extent that its financial information would boost its public trust and thus boost its corporate value.
The company expects its third quarter performance results would be better than the second quarter results as it would be peak demand season for IT products, further improving its sales and profit. The company will continue to strengthen its strategies to expand its market shares for products and cut costs to remain cost competitive. nw

Vice Chairman Lee Yoon-woo of Samsung Electronics Co