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Monday, May 11, 2009

Samsung consolidates profit margin

Samsung Electronics Company Limited has announced a consolidated operating profit of $470 billion, about N69.0 trillion, for the first quarter ended March 31, 2009. This amounts to a 13 per cent decline from the fourth quarter of 2008.

Announcing this, Vice President and Head of Samsung Electronics’ Investor Relations Team, Robert Yi, said the operating profit for the quarter was $470 bn on a consolidated basis, representing a strong turnaround from the 740 billion loss in the previous quarter.

According to him, the net income reached 620 billion, which is up from the previous quarter due to an increase in equity income.

Mr. Yi noted that despite the extremely challenging market environment, Samsung made a strong recovery from the fourth quarter of 2008, supported by stabilizing semiconductor prices, increased profit margin for mobile phones, and careful control of marketing and other expenditure.

“The global economy is likely to continue to recover in the second quarter but lingering uncertainty means it is difficult to predict a sharp improvement in demand or the business environment in the near term. We will respond to the difficult market situation by seeking to reinforce our market and technological leadership, focusing on high-end products and further enhancing our global supply chain management,” he said.

He said Samsung’s semiconductor divisions recorded an operating loss of 670 billion and that revenue reached 5.52 trillion, a 5 per cent decline quarter-on-quarter.

“Despite continuing weak demand and seasonality, Samsung maintained market leadership and saw operating performance improve compared with the fourth quarter of 2008,” he said.

The Liquid Crystal Display (LCD) Division, he said, recorded revenue of 4.11 trillion and an operating loss of 310 billion, stressing that Samsung outperformed the broader market in LCDs, thanks to increased sales of large-size panels.

In addition, he said that the LCD division registered 6 million in unit sales, increasing its global market share, while the Chinese consumer electronics market remained relatively strong, whereas Samsung sought to increase sales of premium LCD products and slim LED panels to this important market.

On the Samsung’s Telecommunications divisions, he said, rebounded in the first quarter to record a profit margin of 11 per cent, after registering 1 per cent in the previous quarter.

“The telecommunication division posted revenues of 9.77 trillion and an operating profit of 1.12 trillion on a consolidated basis. Samsung also maintained unit sales at the same level, despite a contraction in the overall market. The introduction of a selection of new mid- and high-end mobiles enabled the company to increase its unit sales price,” Mr. Yi said.

Samsung’s Digital Media divisions, also, registered improved operating profit of 380 billion in the first quarter on a consolidated basis, as sales of premium product lines increased and marketing expenditure was carefully controlled.

Revenue was 10.07 trillion won, a 20 percent decline from the previous quarter due to seasonality.

Mr. Yi further forecast demand will increase marginally in the second quarter driven by seasonal factors and the introduction of digital broadcasting in the United States.

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