July 16, 2004 in Social Responsibility News

SAMSUNG Electronics Announces Record Sales of KRW 14.98 Trillion

SEOUL, Korea ? July 16, 2004: Samsung Electronics Co., Ltd. announced its financial results for the second quarter of 2004. Sales revenue reached KRW 14.98 trillion, barely touching the KRW 15 trillion mark. Although operating income and net income at KRW 3.73 and KRW 3.13 trillion, respectively, decreased from the past quarter, year-on-year operating and net income grew by 222% and 177%, respectively.
The Semiconductor Business had a stellar second quarter as it achieved the highest ever quarterly sales and operating profit figures at KRW 4.58 and KRW 2.15 trillion, respectively. Despite a decrease in NAND flash memory prices and traditionally slow market in the second quarter, sales and operating profits grew by 11% and 21%, respectively, from the previous quarter bolstered by an increase in DRAM prices. In particular, operating profit margins were at 43%, evidence of Samsung's achievement of both a quantitative and qualitative growth.
The LCD Business also reported growth with a quarter-on-quarter increase in sales of 4% and operating profit of 33%. Recent concerns that sales would decline for LCD panel manufacturing companies due to a slowed growth of the DTV market were mitigated by the company's growth in the past two quarters for the LCD Business.
The Telecommunication Network Business,


which

reported surprising growth in the first quarter, had another spectacular quarter with sales of 22.7 million units in the second quarter. As a result, the division's market share is expected to rise to approximately 14% to 15% from the 13% achieved in the first quarter. Although margins have dropped due to pricing pressures and a rise in marketing costs in the fiercely competitive US market, operating margins still remained at a healthy 16%. In addition, Samsung has increased its unit sales forecast from 65 million to 86 million units foreseeing a strong growth in sales from the launch of new models in the third quarter.
The Digital Media Business and Digital Appliance Business recorded a slight loss due to the stagnant domestic market. However, the company expects demand for digital TVs to increase from the second half with the adoption of a digital TV broadcast standard in Korea and a boost in sales arising from viewers of the Olympic Games. The company expects Digital Appliance


Business division

to gradually recover with the sales of premium products, such as system appliances.
Despite the uncertainty of the world economy and oversupply situation of certain products, Samsung has made a decision to drastically increase annual capital expenditure from KRW 7.9 to KRW 8.9 trillion in order to expand the gap between it and its competitors.
The company in its mission to increase shareholder value has decided to raise interim dividend from last year's KRW 500 to KRW 5,000. The increase will be considered as a special dividend and is a move to share its record-breaking first half profits with shareholders.
Revenue Break-down by Business






Business

1Q04

2Q04

Growth





Semiconductor

4.12

4.58

11.1%





Memory

3.16

3.57

12.7%





System LSI+

0.54

0.62

15.3%





LCD


2.37

2.47

4.2%





Telecommunication Network

4.85

4.94

1.8%





Mobile Phone

4.61

4.61

-





Digital Media

2.17

1.99

(8.4%)





Digital Appliance

0.80

0.89

10.7%





TOTAL REVENUE

14.41

14.98

3.9%







Operating Profit






Business

1Q04

Margin

2Q04

Margin

Growth





Semiconductor

1.78

43.2%

2.15

46.9%

20.6%





LCD

0.84

35.3%

0.82

33.1%

(2.3%)





Telecommunication Network

1.26

25.9%

0.80

16.1%

(38.4%)





Digital Media

0.14

6.5%

(0.007)

-

-





Digital Appliance

0.06

7.1%

(0.01)

-

-





TOTAL OPERATING PROFIT

4.01

27.8%

3.73

24.9%

(6.9%)







About Samsung Electronics


Samsung Electronics Co. Ltd. is a global leader in semiconductor, telecommunication, digital media and digital convergence technologies with 2003 parent company sales of US$36.4 billion and net income of US$5.0 billion. Employing approximately 88,000 people in 89 offices in 46 countries, the company consists of six main business units: Corporate Technology Operations, Digital Appliance Business, Digital Media Business, LCD Business, Semiconductor Business and Telecommunication Network Business. Recognized as one of the fastest growing global brands, Samsung Electronics is the world's largest producer of color monitors, color TVs, memory chips, TFT-LCDs and VCRs. For more information, visit www.samsung.com .


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