July 20, 2001 in Social Responsibility News

SAMSUNG Electronics Second Quarter Sales Reached KRW 8 Trillion

SEOUL, Korea # July 20, 2001 # Samsung Electronics Co., Ltd. announced today, its earnings for the second quarter of 2001, total earnings for the first half of 2001, as well as its business forecast and plans for financial restructuring. Samsung Electronics announced sales of KRW 8 trillion, a before-tax of KRW 950 billion, and an operating profit of KRW 600 billion. Total sales for the first half of this year recorded KRW 16.7 trillion with operating profit of KRW 2.2 trillion.

Second quarter earnings compared to the previous quarter were as follows: Sales decreased by 7% from KRW 8.6trillion to KRW 8 trillion and pretax profit decreased 39%, going from KRW 1.55 trillion to KRW 950 billion. Total earnings for the first half of 2001 were: Sales of KRW 16.7 trillion, a 2% increase from KRW 16.4 trillion of last year while profit before tax saw a decline of 42% totaling KRW 2.5 trillion compared to KRW 4.3 trillion of last year.
The Breakdown of sales according to individual businesses are as follows: The Semiconductor Business accounted for KRW 2.2 trillion, Information and Communications Business with KRW 2.3 trillion, Digital Media with KRW 2.2 trillion, Home Appliances with KRW 900 billion, and other businesses contributed KRW 400 billion.
Second quarter earnings for the individual business groups were as follows: For the Semiconductor Business, Memory Division accounted for KRW 1.4 trillion, TFT-LCD Division with KRW 500 billion, System LSI Division at KRW 400 billion, totaling KRW 2.2 trillion. For the Information and Communications Business Group, Wireless Division was at KRW 1.6 trillion, Network Division was at KRW 60 billion and other division was at KRW 10 billion to total KRW 2.3 trillion. The Digital Media Business totaled KRW 2.2 trillion, Home appliances Business at KRW 900 billion. While the Information and Communications Business and Home Appliance Business grew 22% and 15% respectively compared to the first quarter, Semiconductor and Digital Media Businesses saw a decrease of 27% and 13% respectively.
Operating profit for the second quarter totaled KRW 600 billion with Semiconductors accounting for KRW 260 billion, Information and Communications accounting for KRW 300 billion. Information and Communications operating profit went from 14% in the first quarter to 49%.
Digital media and Home Appliances recorded operating profits of 30 billion won and 80 billion respectively, reflecting the economic recession.
Despite the downturn of the global IT market with other major semiconductor companies recording losses up to USD 300 million, Samsung Electronics was able to maintain a profit margin, proving its global competitiveness.
Another point to take note of aside from the second quarter earnings is the reduction of liabilities by KRW 1.3 trillion (including KRW 700 billion in loans). Debt to equity ratio decreased by 10% going from 57% in the first quarter to 47%. Capital ratio increased by 4%, going from 64% in the previous quarter to 68%. This gives Samsung Electronics a sound foundation to benefit from when the economy begins to pick up.
Although return on equity recorded at 19%, a decrease of 10% compared to the first quarter, Samsung Electronics maintains its global status.
Total sales profit went from 31% to 26%. Despite of the sharp decline in DRAM and LCD prices, an increase in domestic sales in the Information and Communications and Home Appliances Business along with production cost competitiveness allowed only a 5% decrease.
The second quarter’s active marketing strategies development and technological revolution are such Samsung mobile phone ranking in the global top five, the successful entry of Samsung’s CDMA network equipment supply to China, expanded manufacturing design rule of 0.17㎛ in memory chips, the effort to reduce the total number of components for TFT-LCD less than 100, and the introduction of the first largest 63” PDP TV which have accelerated its Digital Convergence project to become an innovator and top in the digital era.
During the Samsung Electronics board meeting, it was decided to distribute a 10% of dividends in the first half of this year which will amount around KRW 84 billion for the shareholders.
About Samsung Electronics
Samsung Electronics Co. Ltd. is a global leader in semiconductors, the consumer electronics industry, and digital convergence technology. With year 2000 sales of US $27 billion, Samsung employs approximately 66,000 people in 46 countries. The company is the world’s largest producer of memory chips, TFT-LCDs, CDMA mobile phones and monitors and the sixth-largest manufacturer of mobile phones. Samsung Electronics consists of four main business units: Digital Media, Semiconductor, Information & Communications, and Home Appliance Businesses. For more information, please visit http://www.samsungelectronics.com


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