Samsung Electronics posts 77 tn won in sales, 14 tn won in operating profit in Q2

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SEOUL: Samsung Electronics posted 77 trillion won in sales in the second quarter of this year, the second-highest ever.

Despite the recent market uncertainties such as the prolonged Ukraine-Russia war, inflation, decreased demand and economic slowdown, Samsung Electronics posted quite good performance.

Samsung Electronics announced its provisional second-quarter earnings on the 7th. It said it posted 77 trillion won in sales and 14 trillion won in operating profit.

Compared to the second quarter of last year, sales operating profit increased 20.94 per cent and 11.38 per cent, respectively.

Sales decreased 1 per cent from the record high of 77.78 trillion won in the first quarter, but this is the highest second-quarter sales ever. Operating profit fell 0.85 per cent from 14.12 trillion won in the first quarter, but hit the third-highest second-quarter operating profit.

Compared to the market consensus (77.567 trillion won in sales and 14.7483 trillion won in operating profit), Samsung Electronics’ second-quarter sales are similar but operating profit is slightly lower.

Since Samsung Electronics surpassed 70 trillion won in sales for the first time in the third quarter of last year, it continued to post record-high sales for three consecutive quarters until the first quarter of this year.

Samsung Electronics did not reveal detailed earnings by division, but it is analyzed that strong sales of semiconductors and exchange rates may lead the high performance.

Security firms estimated that Samsung Electronics’ semiconductor division posted about 10 trillion won in operating profit in the second quarter.

Although demand for PCs and mobile devices decreased due to China’s lockdown, strong demand for servers such as data center led the performance.

On the other hand, sales of home appliances and smartphone divisions are estimated to decrease as demand has decreased due to inflation and economic slowdown.

Securities firms estimated that Samsung Electronics’ smartphone shipments were 61 million units in the second quarter, down more than 10 million units from 73 million units in the first quarter. TV shipments were also estimated at 9 million units, down 28 per cent from the previous quarter.

Despite unfavorable market conditions, Samsung Electronics posted a good performance in the second quarter with a strong exchange rate effect.

The average dollar/won exchange rate in the second quarter was 1,260 won, up 12 per cent from a year ago and 5 per cent from the previous quarter.

In the first quarter, Samsung Electronics estimated the exchange rate effect contributed to operating profit was 300 billion won when the average exchange rate (1,205 won) rose 1.8 per cent from 1,183 won in the fourth quarter of last year. Considering this estimation, it is expected that the exchange rate effect in the second quarter is about 830 billion won.

As semiconductors are traded in dollars, sales and operating profit will increase when the performance is converted into won.

In terms of smartphones and home appliances, raw materials and transportation costs have increased, but products produced at overseas plants are traded in local currency, so the negative impact of the rise in dollar was offset.

Samsung Electronics’ future performance outlook is still unclear.

An industry source said, “The economy has been slowdown rapidly since the second quarter, but it seems that it has not been reflected in the earnings yet. So it is likely to affect the second-half earnings.”

In particular, the price of memory chips, Samsung Electronics’ main products, has significantly decreased. Trendforce predicted that DRAM prices will decrease up to 10 per cent in the third quarter, and NAND Flash prices are on the decline.

However, as Samsung Electronics’ new foldable phones “Galaxy Z Fold 4” and “Flip 4,” which will be released in the third quarter, are expected to positively affect third-quarter earnings.

In addition, some analysts said Samsung Electronics’ performance will remain strong as demand for servers is still stable and foundry yield and product prices are increasing. (ANI/Global Economic)

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