Samsung reports strong Q2, sees record year

Samsung Electronics Co. Ltd., South Korea’s largest electronics company, has reported healthy increases in both sales and profits for the second quarter of the year on the back of strong sales in three of its main product areas.

The Seoul company said Friday that operating income in the second calendar quarter was 1.87 trillion won (US$1.6 billion), an increase of 212 per cent on the same three months a year earlier. Net sales rose by 24 per cent to 9.94 trillion won and net income was 1.92 trillion won. A year ago, the company said net income for the second quarter of 2001 was 1.2 trillion won.

Behind the rise were higher sales of DRAM (dynamic RAM) computer memory chips, TFT (thin film transistor) LCD (liquid crystal display) flat panel displays, non-memory semiconductors and mobile telephone handsets, said Samsung. The first two product sectors are highly cyclical and in the second quarter both were expanding and prices were also rising.

Measured against a year ago, the figures look particularly rosy because the company’s business was declining at that time in the face of a worldwide slowdown in the industry that led to an even lower third quarter in which the company barely managed to break even. Compared to the first quarter of this year, sales were almost equal while operating income was down.

By sector, the semiconductor business was easily Samsung’s sales and income leader with 3.24 trillion won in sales and 1.07 trillion won in net income. It was followed by the information and telecommunications business, which saw sales of 2.77 trillion won and net income of 610 billion won; the digital media business, with sales of 2.44 trillion won and net income of 150 billion won; and the home appliance sector, which reported sales of 1.06 trillion won and net income of 90 billion won.

Looking ahead, Samsung said it expects 2002 to be a record-breaking year for the company. It explained its optimism as based on a more competitive product line-up, wider income structure, higher brand awareness and value, better productivity and concentration on value-added products.