January 08, 1996 in Social Responsibility News

SAMSUNG Electronics to Achieve W21 Trillion in Sales in 1996

.Company holds conference for investors on February 8.
.Pretax income to stay at 12% on total revenue until 2001.
.Bonus issue and dividend increase under consideration.
.Strong confidence expressed in semiconductor operations.

(Seoul) - On February 8 Samsung Electronics Co. (SEC) held a conference at the Hilton Hotel Convention Center in Seoul to explain its current financial situation and future prospects to more than 500 representatives of institutional investors, individual investors, and persons working in the securities business. Also in attendance were Samsung Electronics Vice-Chairman & CEO Kwang-Ho Kim and other senior members of SEC management.

At the conference, Samsung Electronics revealed estimates that its total sales for 1995 came to W16.2 trillion (US$21 billion), with W3 trillion in pretax income (US$3.9 billion). The prediction for 1996 was W21 trillion (US$27 billion) in sales and W3.2 trillion (US$4.2 billion) in pretax income.

Samsung officials said that W28 trillion (US$37 billion) in additional investment would be made by 2001 and that the company would achieve a 20% annual growth rate over the period. Total sales for the year 2001 were forecast at W45 trillion (US$60 billion), with exports accounting for US$40 billion. The officials stated that pretax income would be W5.4 trillion (US$7 billion), or 12% of total sales, for 2001. Their vision for the 21st century is for Samsung Electronics to be among the world? top five electronics concerns.

Earnings per share is forecast to be W38,000 (US$50) in 1996. That would mean a price-earnings ratio (P/E ratio) of about 3.6 multiples, based on the current share price. Considering that the P/E ratio at other leading electronics and semiconductor companies is between 10 and 15 multiples, the Samsung Electronics?share price is extremely undervalued, according to SEC officials.

Samsung Electronics Vice-charirman & CEO is quoted as saying, We are positively considering a bonus issue and paying dividend based on market value in the interest of returning greater part of profits to investors, as the company? income has greatly improved. Current commercial law does not allow us to pay dividends based on market stock value, but we intend to implement this method as soon as it is admissible.

Mr. Kim also commented on the prospects for the semiconductor industry, which has been under fire recently. He predicted that the world market would continue to grow at an average of 17% a year, reaching US$330 billion by 2001. He said that a drop in world chip prices was inevitable, but Samsung? high yield and high productivity provide a strong price competitiveness that will allow the company to maintain an pretax income of 12% on total sales.

In addition to semiconductors, Samsung Electronics has selected multimedia and information systems as ?trategic business areas?that will lead corporate growth in the 21st century. Concentrated investment will be made in these areas to develop the company into a major world player of the future.

Samsung Electronics Co., Ltd., headquartered in Seoul, is a world leader in the electronics sector, with operations in more than 70 countries. The company develops, manufactures, and markets audio and video products, household electronics goods, computers & peripheral products, display products, telecommunication & information systems, software tools & semiconductors.


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