October 15, 2004 in Social Responsibility News

SAMSUNG Electronics Announces Third-Quarter Sales of KRW 14.34 trillion

SEOUL, Korea ? October 15, 2004 - Samsung Electronics Co., Ltd. announced its financial results for the third quarter of 2004. The company achieved sales of KRW 14.34 trillion, operating profit of KRW 2.74 trillion and net profit of KRW 2.69 trillion. Year-on-year sales, operating profit and net profit grew by 27-percent, 34-percent and 46-percent, respectively.
The company continued to achieve sales of over KRW 14 trillion for the third straight quarter. For the three quarters of 2004, Samsung recorded sales of KRW 43.7 trillion, exceeding 2003 annual sales of KRW 43.6 trillion. Cumulatively, Samsung achieved operating profits of KRW 10.48 trillion for the first three quarters of 2004, becoming the first Korean company to transcend the KRW 10 trillion profit milestone.
Quarter-on-quarter, sales decreased by 4-percent due to the state of the domestic market and weakening export conditions. Operating profits declined by 27-percent from rising raw material costs and increased marketing spend, including the Olympic sponsorship program.
The Semiconductor Business had another outstanding quarter with the stabilization of DRAM prices and the increased demand of NAND flash memory from a strategic drop in prices. Sales increased 4-percent quarter-on-quarter to KRW 4.74 trillion, the greatest ever recorded sales figure by the business. Operating profits were at KRW 1.95 trillion.
Despite the decrease in NAND flash memory prices, Samsung was able to sustain margins of over 40-percent through product differentiation and aggressive cost-cutting measures; evidence of the company's ever-growing competitiveness in the memory business.
The Telecommunication Network Business sold 22.7 million phones in the third quarter, a similar level as the second quarter, to record sales of KRW 4.82 trillion, notwithstanding the depressed demand in the domestic market and intensifying competition overseas. At the same time, operating profits declined to KRW 610.6 billion from the previous quarter.
While the ASP of mobile phones actually increased, strategic marketing and R&D investments, including Olympic marketing costs, were causes for the decline. On a cumulative basis, Samsung sold 65.5 million mobile phones during the three quarters of 2004 surpassing the 55.6 million units sold throughout the entire year of 2003. The company expects a 2- to 3-percent rise in market share from the 11-percent recorded last year.
The LCD Business reported a quarter-on-quarter decrease of 23-percent for KRW 1.90 trillion in sales due to declining prices of large-sized LCD panels. Operating profits dropped 72-percent from the previous quarter to KRW 225.0 billion.
The Digital Media Business and Digital Appliance Business, which conducts 80% of their production and sales overseas, recorded a loss of KRW 33 billion and KRW 9 billion, respectively, due to affects of the stagnant domestic market.
Dr. Woosik Chu, Senior Vice President and General Manager of the IR Team, states, “This third quarter, Samsung Electronics surpassed operating profits of KRW 10 trillion during difficult economic times not only in Korea but throughout the world. In three quarters, the company has already outperformed the sales reported during the entire year of 2003 and the semiconductor business managed to produce record quarterly sales.” He adds, “The performance thus far speaks to the competitiveness of the company's differentiated businesses. Even as market conditions are expected to worsen, we will continue to expand our differentiated competitiveness to maintain our strong financial structure.”

Revenue Break-down by Business ( in trillion won )









Business

3Q03

2Q04

3Q04

Y/Y Growth

Q/Q Growth


Semiconductor

3.38

4.58

4.74

40%

4%





Memory

2.55

3.57

3.64

43%

2%





System LSI

0.44

0.62

0.63

43%

2%





LCD

1.38

2.47

1.90

38%

(23%)





Telecommunication Network

3.74

4.94

4.82

29%

(2%)





Mobile Phone

3.41

4.61

4.57

34%

(1%)





Digital Media

1.87

1.99

1.95

4%

(2%)





Digital Appliance

0.77

0.89

0.81

5%

(9%)











Total Revenue

11.26

14.98

14.34

27%

(4%)





Operating Profit Break-down by Business ( in trillion won )









Business

3Q03

Margin

2Q04

Margin

3Q04

Margin


Semiconductor

1.12

33%

2.15

47%

1.95

41%





LCD

0.23

17%

0.82

33%

0.23

12%





Telecommunication Network

0.75

20%

0.82

33%

0.23

12%





Digital Media

0.002

0%

(0.007)

0%

(0.033)

(2%)





Digital Appliance

(0.046)

(6%)

(0.011)

(1%)

(0.009)

(1%)











Total Operating Profit

2.05

 

3.73

 

2.74

 








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 and TFT-LCDs. For more information, visit www.samsung.com


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