Samsung Electronics' Operating Profit Hits Lowest in 4 Years Due to Semiconductor Slump (Update)

[Asia Economy Reporter Changhwan Lee] Samsung Electronics' operating profit last year plummeted by more than 50% compared to the previous year, marking the lowest level in four years. The biggest cause was the decline in the semiconductor division's performance due to falling memory semiconductor prices. However, the fourth-quarter results exceeded market expectations, raising hopes for a future earnings rebound.

Samsung Electronics announced on the 30th that it recorded sales of 230.52 trillion KRW and an operating profit of 27.76 trillion KRW last year. Compared to the previous year, sales decreased by 5.48% and operating profit by 52.84%, respectively.

This performance is the lowest in four years since recording an operating profit of 26.4 trillion KRW in 2015.

The biggest cause of the performance decline is semiconductors. Samsung Electronics' semiconductor division recorded sales of 64.94 trillion KRW and an operating profit of 14 trillion KRW last year. In 2018, it achieved sales of 86.29 trillion KRW and an operating profit of 44.57 trillion KRW, which dropped by 25% and 69%, respectively.

Last year, the sharp decline in DRAM prices worsened semiconductor performance.

The display division also saw its operating profit decrease by about 40% to 1.58 trillion KRW last year, compared to 2.62 trillion KRW the previous year. This is interpreted as being affected by the decline in LCD prices and other factors.

The consumer electronics division's operating profit last year increased by about 30% to 2.61 trillion KRW, while the IT & Mobile (IM) division's operating profit decreased by about 9% to 9.27 trillion KRW compared to the previous year.

However, the better-than-expected fourth-quarter results are positive.

Samsung Electronics' fourth-quarter sales last year were 59.88 trillion KRW, and operating profit was 7.16 trillion KRW. Sales increased by 1% year-on-year, while operating profit decreased by 33.7%.

The IM division's operating profit surged about 67% year-on-year to 2.52 trillion KRW. The consumer electronics division's operating profit also increased by about 19% year-on-year to 810 billion KRW.

On the other hand, the semiconductor division's operating profit decreased by about 55% year-on-year to 3.45 trillion KRW.

This content was produced with the assistance of AI translation services.