Followed by first quarter, Samsung Electronics and LG Electronics made another positive performance in second quarter as well. With IT and mobile departments leading the way, Samsung Electronics’ semiconductor, household appliance and other departments showed steady increased trend. On the other hand, LG electronics’ TV and household appliance businesses recorded their biggest operating profits in history. While predictions of second half are looking bright also, both companies are going to focus on continuing their positive trends.
Samsung Electronics made an official announcement on the 28th that it made $45.3 billion (50.94 trillion KRW) and $7.23 billion (8.14 trillion KRW) in sales and operating profits respectively from itself and its affiliates during second quarter. Compared to second quarter of last year, sales and operating profits increased by 5% and 18% respectively.
Looking at individual sectors, IT and Mobile (IM) Sector led the way by making $23.6 billion (26.56 trillion KRW) and $3.84 billion (4.32 trillion KRW) in sales and operating profits respectively. Positive trend of sales from Galaxy S7 and S7 Edge had played a major role.
From DS (Device Solution) Sector, semiconductor department made $10.7 billion (12 trillion KRW) and $2.35 billion (2.64 trillion KRW) in sales and operating profits respectively while display department made $5.70 billion (6.42 trillion KRW) and $124 million (140 billion KRW) in sales and operating profits respectively.
CE (Consumer Electronics) Sector also made a positive performance by making $10.3 billion (11.55 trillion KRW) and $915 million (1.03 trillion KRW) in sales and operating profits respectively. CE Sector made $1.37 billion (1.54 trillion KRW) of operating profits just from first half and it surpassed last year’s total operating profits.
It is expected that Samsung Electronics will continue its positive trend in sales in second half of this year. Components businesses will enter peak season while set businesses will maintain their profitability based on premium products.
Semiconductor department is going to secure competitive edge in production cost by increasing percentage of 20-nano D-RAMs and strengthen its high-tech processes. System LSI business, which had made success by diversifying foundry customers and strengthening lineups of mobile APs (Application Processor), is going to maintain leadership in high-tech process technologies that are less than 14 nanometers and continue steady trend of its sales through diversification of customers and products. It is expected that demands for small and mid-sized OLED panels will continue to increase for display department.
Galaxy Note 7, which will be introduced early August, will lead the way for IM Sector while Galaxy S7 and S7 Edge will support IM Sector’s sales. CE Sector is going to maintain its profitability continuously through premium strategies and competitive edge in distribution.
Samsung Electronics made an announcement of its plan on investments in the future along with announcement of its performance.
“We had carried out total of $7.82 billion (8.8 trillion KRW) in first half of this year and although plan for this year’s entire facility investments is not confirmed yet, I expect that it will be slightly bigger than last year.” said Executive Director Lee Myeong-jin who is in charge of Samsung Electronics’ IR. “Investments in second half will focus on OLED and extending facilities for V-NAND.”
LG Electronics, which made an announcement of its performance at the same time, made positive performances in two quarters in a row. LG Electronics made $12.4 billion (14.0029 trillion KRW) and $519 million (584.6 billion KRW) in sales and operating profits respectively from itself and its affiliates during second quarter.
H&A (Home Appliance & Air Solution) Business Headquarters, which is responsible for household appliances, and HE (Home Entertainment) Business Headquarters made their biggest quarterly operating profits ever by making $385 million (433.7 billion KRW) and $317 million (356.7 billion KRW) respectively. HE Business Headquarters made its biggest quarterly operating profit ratio at 8.6% while H&A Business Headquarters again made 9% range of operating profit ratio for two quarters in a row with 9.2%. MC (Mobile Communication) Business Headquarters could not get out of slump once again by recording a loss of $136 million (153.5 billion KRW).
Although household appliance markets are entering their slow season during second half of this year, LG Electronics is going to secure its profitability by going after premium products and B2B markets.
HE Business Headquarters is also going to focus on selling premium products such as OLED TV, Ultra HD TV and others to maintain profitability. MC Business Headquarters is going to continue improving profit structure along with release of new products such as successor of V Series and others and look to rebound. VC Business Headquarters is going to improve its performance and market image by mass-producing components for GM’s Chevrolet Bolt EV that is expected to be released at the end of August.
Staff Reporter Kwon, Keonho | wingh1@etnews.com
