Samsung consolidated operating profit hits 29.05 trillion for 2012

samsung

Accra, Jan 30, - GNA - Samsung Electronics Company Limited has announced revenues of 56.06 trillion Korean won on a consolidated basis for the fourth quarter ended December 31, 2012, representing a seven per cent increase quarter-on-quarter.

Consolidated operating profit for the quarter hits 8.84 trillion won, representing a 10 per cent increase on-quarter, while consolidated net profit for the same quarter was 7.04 trillion won.

A statement copied to the Ghana News Agency on Wednesday said the full-year 2012 operating profit was 29.05 trillion won on revenue of 201.10 trillion won.

In its earnings guidance disclosed on January 8, Samsung estimated fourth quarter consolidated revenues would reach approximately 56 trillion won with consolidated operating profit of approximately 8.8 trillion won.

Highlighting the quarterly performance, Mobile Communications generated quarterly revenues of 27.23 trillion won, a 4-percent increase compared with the previous quarter.

The growth was mainly driven by solid sales of Samsung's GALAXY S III and GALAXY Note II. All told, operating profit for IT & Mobile Communications, which encompasses four business units including Mobile Communications, was 5.44 trillion won on revenues of 31.32 trillion won.

'Despite uncertainties in Europe and concerns over the U.S. fiscal cliff creating a difficult business environment, we did our best this quarter to achieve strong earnings based on a strategic focus on differentiated and high value-added products as well as our technological competitiveness,' said Robert Yi, Senior Vice President and Head of Investor Relations in the statement.

'Heading into this year, we are expecting a slow recovery in the component business due to reduced capital expenditures, while competition in the set business will intensify further as demand slows and the mid- to low-end market expands,' he added.

Mr. Yi also expressed caution over the continued strength of the Korean won in 2013.

Samsung's standout lineup of LED TVs, including premium models targeting advanced markets and TVs tailored to emerging markets, has also improved quarter-on-quarter earnings, the statement said.

Although demand for home appliances retreated in the December quarter due to a tepid global economy, it said, Samsung saw increased sales of high-end refrigerators and washers in the U.S. and in European markets.

On the components business side, the statement said, demand for PC DRAM remained weak but growth of high value-added products such as server and mobile DRAM was constant due to increased sales of mobile devices. While the Semiconductor Business landed profits in the quarter, the Display Panel segment struggled, as demand for IT panels for notebooks and monitors remained slow.

On the other hand, profitability in LCD panels for TVs and OLED panels for smartphones prevented wider losses.

'As for this year's capital expenditure, the size of investment is expected to be similar to that of 2012's. The weakening global economic recovery and looming market uncertainties are anticipated to weigh on plans for investment and performance this year, but despite global economic jitters, Samsung will respond to the market's ebb and flow with a capex plan that is flexible in manner,' it said.

It said Samsung's Semiconductor Businesses - including Memory and System LSI - posted consolidated 9.59 trillion won in revenue, a 10-percent hike from a quarter earlier.

The Memory chip unit accounted for 5.33 trillion won in earnings and with the logic chip unit yielded 1.42 trillion won in operating profits, up 39 percent on-quarter. 

The statement said the Semiconductor Business sustained profitability in the quarter, amid weak market demand, thanks to a mix of high-margin products such as servers and Solid State Drives (SSDs) coupled with differentiated 20-nanometer class NAND flash chips.

'A competitive edge in mobile application processors for smartphones and tablet PCs also contributed to the bottom line,' the statement said.

Looking ahead, it said, demand for memory chips was expected to be stifled in the first quarter, due to the seasonably weak demand for PCs and mobile devices.

However, it added, for the remainder of 2013, high value-added DRAM for mobile devices and servers would sustain profitability and demand for logic products and NAND solutions including SSDs would remain strong throughout the year, as the industry put greater emphasis on devices with higher capacity, greater processing power and mobility.

At Samsung's Display Panel Business, the company recorded an operating profit of 1.11 trillion won on revenue of 7.75 trillion won in the fourth quarter. This represented a 5-percent decline in profits compared with the previous quarter but was up from the corresponding quarter of 2011.

Despite slower-than-expected economic recovery in developed markets, the statement said, panel demand in China and emerging economies remained favorable in the quarter. 'This was led by solid sales of TV and tablet panels which offset the slowdown in notebook and monitor panel demand.     Samsung was able to secure stable growth for the quarter with an improved product mix and strengthened sales of high-end panels.'

Sales of LED and narrow bezel panels for premium TVs, it said, continued to grow, although the company's TV panel sales dropped in the mid single-digit percentage range from the same period last year. However, increased sales of tablet panels as well as OLED panels for premium smartphones contributed to steady growth.

Looking ahead to 2013, the statement said, the company expected the market for large-size TV panels, those over 60 inches in size, to grow.

'Strong sales of tablet panels are also forecast to continue throughout the year. For the first quarter, however, panel demand is expected to be adversely affected by off-peak seasonality before recovering in March with new TV and tablet product launches by manufactures.'

The IT and Mobile Communications unit of the company posted operating profits of 5.44 trillion won on 31.32 trillion won in revenue for the period.

Out of the total IM earnings, the handset-making unit claimed 27.23 trillion won in revenue in the October-December quarter.

'Samsung led gains with its full lineup of entry- to mid-level smartphones, expanded sales of tablet PCs and an increase in average selling price (ASP) from the previous quarter. The success was mainly brought on by strong sales of GALAXY S III and GALAXY Note II, which beat the popularity of their predecessors with record sales in record time.'

In contrast, the statement said, growth in network and IT-related IM businesses was stunted by heated pricing in the fourth quarter and on a brighter note, sales of Long Term Evolution (LTE) wireless broadband technology equipment continued gains while revenue from overseas sales of notebook PCs improved.

'The furious growth spurt seen in the global smartphone market last year is expected to be pacified by intensifying price competition compounded by a slew of new products. In the first quarter, demand for smartphones in developed countries is expected to decelerate, while their emerging counterparts will see their markets escalate with the introduction of more affordable smartphones and a bigger appetite for tablet PCs throughout the year.' 

The Consumer Electronics Division posted revenue of 13.95 trillion won for the quarter, up 20 percent quarter-on-quarter. The operating profit of 740 billion won amounted to an increase of 87 percent on the previous quarter and an increase on-year.

GNA