Samsung SDS reports record net profit in 2019

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Samsung SDS reports record net profit in 2019

Samsung SDS reported record 2019 earnings last year on increased revenue from non-Samsung Group clients.

Samsung SDS achieved a net profit of 750.4 billion won ($635 million) last year, up 17.5 percent from a year earlier.

Operating profit for 2019 rose 12.8 percent on year to 990.1 billion won, while sales increased 6.8 percent to 10.71 trillion won.

All figures are record highs, according to Samsung SDS.

The company said revenue from non-Samsung clients jumped 31 percent on year to 1.8 trillion won, adding that this was a main driver of the strong result.

Samsung SDS logged sales of 5.8 trillion won in IT services, up 3.8 percent, with 1 trillion won coming from clients other than Samsung Group companies.

Artificial intelligence analytics and the cloud business, areas of focus for the company, continued to deliver more than 30 percent of sales, according to the company.

Its logistics business process outsourcing unit achieved 4.8 trillion won of sales, up 10.7 percent, with 770 billion won coming from non-Samsung clients.

Samsung SDI reported a 35.4 percent drop in operating profit to 462.2 billion won.

Revenue was up 10.3 percent to 10 trillion won on year. Of total sales, electronics materials contributed 2.4 trillion won, up 7.9 percent.

The division brought in 7.7 trillion won in revenue, an 11 percent increase.

The poor results are due to the cost of installing safety equipment in energy storage systems (ESS) and weak demand for small batteries.

Concerns over the safety of ESS increased after the storage system sites caught fire last year.

In projecting 2020 earnings, SDI anticipates solid growth in demand for ESS, car batteries and small batteries. But the first quarter could be tough due to seasonal factors.

“Each business division - small, middle and large batteries and electronic materials - will likely face a downturn in demand, affected by cyclical trends,” the company said in a statement.

“This year will show a huge growth in demand for car batteries as the European Union is expected to strengthen its regulations on carbon emissions,” it said.

BY PARK EUN-JEE, YONHAP [park.eunjee@joongang.co.kr]

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