Samsung profit sinks 41%

The net profit of Samsung Electronics Co., the world’s leading memory chipmaker, plunged by 41 percent in the second quarter this year compared with the same period last year, the company reported yesterday. But investors sent the firm’s stock price to a 15-month high of 418,000 won ($348), up 2.4 percent, on the expectation that prices of dynamic random access memory chips would rise and the economy would begin to recover in the third quarter. Samsung’s operating profit was down 38 percent, year on year, to 1.2 trillion won. The firm’s net profit was 1.1 trillion won. Compared to the previous quarter, the firm’s operating profit decreased by 14 percent in the second quarter, while revenues grew by 2.5 percent to 9.8 trillion won. For the first half of the year, Samsung Electronics’ aggregate revenues totaled 19.4 trillion won, and operating profits were 2.5 trillion won. The firm’s net profit stood at 2.3 trillion for the first half of 2003. “Even though operating profits declined considerably, we delivered the performance that meet the expectation of the market, generating more than 1 trillion won in operating profits for the sixth straight quarter,” Cha Young-soo, an investor relations executive at Samsung, said. Exports in the first half of the year increased from 13.7 trillion won last year to 15 trillion won. But domestic sales fell from 5.7 trillion won to 4.5 trillion won, indicating that sluggish demand of the Korean market contributed to the soured performance, the company said. The company’s operating profit breaks down as 570 billion won from the semiconductor division, 550 billion won from the information and communication division, and from the digital media, 40 billion won. The firm’s home appliance division generated 3 billion won in operating profits. In Samsung’s semiconductor division, operating profit was 15 percent of revenues. The figure was 17 percent in information communication, 2 percent for digital media and 0.3 percent for home appliances. The liquid crystal display division showed the most striking growth, up 42 percent over the first quarter to make 1.1 trillion won in revenues. Its performance was attributed to a production increase of large panels from the fifth-generation production lines and growth of demand for liquid crystal display television sets and notebooks, the company said. “Unlike in April or May, orders and sales improved rapidly in June,” Mr. Cha said. “It seems that Samsung Electronics’ performance bottomed out in the second quarter, and will improve in the third and fourth quarters.” Meanwhile, Intel Corp., the largest semiconductor producer in the world, recently an-nounced that its second-quarter revenues grew 7.9 percent to $6.9 billion over the identical period last year. The company’s net profit stood at $896 million, up more than 100 percent year on year. by Kim Hyo-jin