Samsung SDS Opens Era of Quarterly Sales Exceeding 4 Trillion Won

Q1 Sales Increased by 36.9% Year-on-Year
Operating Profit at 273.5 Billion KRW, Up 26%
Logistics Business Boom Due to COVID-19 Impact

[Asia Economy Reporter Seungjin Lee] Samsung SDS has entered the era of quarterly sales exceeding 4 trillion KRW. Samsung SDS announced on the 28th that its sales for the first quarter of this year reached 4.1915 trillion KRW, with an operating profit of 273.5 billion KRW. Compared to the same period last year, sales increased by 36.9% and operating profit by 26%.

Samsung SDS's record quarterly performance was driven by its logistics business. This was due to the logistics boom caused by COVID-19 and the company's focus on the logistics business since last year. Looking at the performance by business sector, logistics business sales recorded 2.739 trillion KRW, up 61.8% from the same period last year, driven by increased IT product shipment volumes and rising logistics freight rates.

Sales in the IT services business were 1.4525 trillion KRW, up 6.1% year-on-year, supported by the cloud transition of enterprise systems such as Management Information Systems (MIS) and Enterprise Resource Planning (ERP), as well as the expansion of next-generation Manufacturing Execution Systems (MES).

Samsung SDS is expanding its logistics business centered on the IT new technology-based logistics platform ‘Cello Square’, launched in August last year. The company plans to launch its China business within the first half of this year and will begin full-scale global operations starting with Southeast Asia this year. Samsung SDS also reorganized its structure last year to focus on the cloud business. As a result, while IT services business sales maintained solid growth, operating profit margins declined due to increased wages.

The operating profit margin for the first quarter of this year was about 6.5%. It fell slightly again after dropping from 6.9% in the second quarter of last year to 6.6% in the third quarter. This is attributed to the impact of increased wages. Samsung SDS raised its employees' base salary by up to 6.5% this year.

In particular, this year, the company plans to train a large number of cloud experts, and operating profit margins are expected to decline further due to labor cost impacts. Samsung SDS established a technology center called the ‘Technical Hub’ to secure cloud technology capabilities and plans to train 4,000 cloud personnel through this initiative.

Meanwhile, Samsung SDS plans to transform into a cloud-specialized company by expanding its cloud business this year through strengthening competitiveness in the MSP (Managed Service Provider) business, training and securing cloud experts, and advancing its own private cloud in the IT sector.

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