Samsung Electronics Breaks Records Again Despite Adversities... Approaching 300 Trillion Won in Sales This Year

Q1 Sales Reach Record High of 77.8 Trillion Won... Memory and Galaxy S22 as Pillars
"Sales Expected to Surpass 300 Trillion Won This Year... Annual Record High Sales and Operating Profit Anticipated"

[Asia Economy Reporter Park Sun-mi] Samsung Electronics has shaken off adverse factors such as sporadic regional lockdowns caused by COVID-19 and the Russia-Ukraine war in the first quarter of this year, setting a new record for the highest quarterly sales ever. With sales exceeding 70 trillion won for three consecutive quarters, the company is also on the verge of surpassing 300 trillion won in sales for the first time this year.

However, the outlook ahead is not very bright. Samsung Electronics' management revealed the challenging market conditions by mentioning the word "uncertainty" dozens of times during the conference call. All business forecasts included countermeasures reflecting the uncertain domestic and international environment.

On the 28th, Samsung Electronics announced that its consolidated sales for the first quarter of this year reached 77.78 trillion won, with an operating profit of 14.12 trillion won. Sales and operating profit increased by 18.9% and 50.5%, respectively, compared to the same period last year. Although the first quarter is traditionally a slow season for the electronics and semiconductor industries, sales in the first quarter increased by 1.6% compared to the fourth quarter of last year, setting a new record for the highest quarterly sales.

At the current pace, the market expects that surpassing 300 trillion won in sales for the first time this year is also possible. Samsung Electronics' annual sales showed a sharp increase from 230.4 trillion won in 2019 and 236.81 trillion won in 2020 to 279.6 trillion won last year.

Despite the decline in memory prices, profitability greatly improved due to strong sales of the flagship smartphone new product, the Galaxy S22 series, and premium TVs. Operating profit and operating profit margin jumped from 9.38 trillion won to 14.12 trillion won and from 14.3% to 18.2%, respectively, compared to the same period last year.

[Image source=Yonhap News]

Exchange rate changes also supported profitability. Samsung Electronics' exchange rate impact in the first quarter was about 300 billion won compared to the previous quarter. The strong dollar and the depreciation of some emerging market currencies against the Korean won negatively affected the mobile and home appliance businesses. However, the positive effects in the components business due to the strong dollar offset these impacts.

Samsung Electronics' facility investment in the first quarter of this year amounted to 7.9 trillion won. By business sector, semiconductor investment was about 6.7 trillion won, and display investment was about 700 billion won. Most of the facility investment was used to expand the semiconductor business, with investments focused on the third phase of the Pyeongtaek infrastructure and process transitions in Hwaseong, Pyeongtaek, and Xi'an to prepare for increased memory demand. Foundry investments were centered on developing advanced processes below 5 nanometers and building production capacity.

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