April 15, 2005 in Social Responsibility News

SAMSUNG Electronics Announces 2005 First-Quarter Earnings

Samsung reports quarterly sales of KRW13.8122 trillion,

operating income of KRW2.1499 trillion and net income of KRW1.4984 trillion.





SEOUL, Korea - April 15, 2005 : Samsung Electronics
Co., Ltd. announced its financial results for the first quarter of 2005.
The company recorded sales of KRW13.8122 trillion, a 0.6% decrease, operating
income of KRW2.1499 trillion, a 40% rise, and net income of KRW1.4984
trillion, a drop of 18% from the previous quarter.



In particular, the rise in operating income came in spite of the difficult
business environment caused by factors such as the strengthening Korean
Won and a depressed IT industry. While sales decreased, operating profits
increased on the back of strong growth in its NAND flash memory business,
favorable mobilephone sales and conscious efforts to reduce selling, general
and administrative expenses. In addition, margins increased by 5 percentage
points to 16% in the first quarter, but net income was impacted by the
equity method loss incurred from the increase in reserves at Samsung Card.
Sales and operating income of the Semiconductor Business decreased to
KRW4.4756 trillion and KRW1.3851 trillion, respectively, because of seasonal
factors and currency exchange rates. However the business continued to
report high margins of over 30%, attesting to its unique cost competitiveness.
With a record quarterly mobile phone shipment of 24.5 million units, the
Telecommunication Network Business recorded sales of KRW4.8394 trillion,
a 12% rise, and operating income of KRW840.5 billion, a dramatic increase
from the prior quarter. In addition, margins improved to 17%. This performance
is attributed to the company's strategy to expand output in the first
quarter, as well as the 4-month cumulative sales of 3.1 million units
of the D500, the company¡¯s popular blue-black GSM phone.



The LCD Business reported revenue and operating income figures of KRW1.8983
trillion and KRW23.1 billion, respectively. Despite a decline in LCD panel
prices, operating profits increased and the company expects its performance
to improve in the second half with a growth in demand for LCD TVs. Digital
Media Business sales decreased by 13.8% to KRW1.6585 trillion because
of restructuring efforts that resulted in the termination or reduced emphasis
of its low- to mid-end product lines. Higher margins from sales of premium
product lines diminished the size of operating losses, compared to the
prior quarter. Sales of its Digital Appliance Business increased 4.1%
to KRW785.8 billion with the growth of sales of high-end home appliances
and reservation sales of air-conditioners. The business reported an operating
loss of KRW13.8 billion, an improvement from the fourth quarter.



Dr. Woosik Chu, Senior Vice President and General Manager of the IR Team,
states, "Despite the challenging business environment, operating
profit increased over the prior quarter, demonstrating the inherent strength
of Samsung¡¯s business model.¡± He adds, "While
we do not expect conditions to improve in the second quarter, Samsung
Electronics will strive to sustain its outstanding financial performance
through new growth opportunities, such as the commercialization of DMB
services and production commencement at our seventh generation LCD line".




Revenue by Business
(in trillion won)










Business

1Q04

4Q04

1Q05

Growth


YoY (%)

QoQ (%)


Semiconductor

4.12

4.78

4.48

9

(6)





Memory

3.16

3.74

3.54

12

(5)





System LSI

0.54

0.49

0.45

(17)

(9)





LCD

2.37

1.95

1.90

(20)

(3)





Telecommunication Network

4.85

4.32

4.84

0

12





Mobile Phone

4.61

3.97

4.56

(1)

15





Digital Media

2.17

1.93

1.66

(23)

(14)





Digital Appliance

0.80

0.75

0.79

(2)

4





Total Revenue

4.12

13.9


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