South Korea's largest consumer electronics and semiconductor maker, Samsung Electronics Co. Ltd., said it saw sales fall and profits dive in the calendar year just ended but is satisfied that it had a better year than many of its competitors.
Samsung Electronics, which announced unaudited financial results, said parent company net profit in 2001 was down 51 percent on the year to 2.9 trillion won (US$2.2 billion). Sales were 32.4 trillion won, down 5.6 percent on the year, while operating profit was 2.3 trillion won, a drop of 68.9 percent on 2000.
"We would like to think that 2001, although not 100 percent to our liking, is at least better and has far outpaced those of other world-class companies in this industry," said Chu Woo-Sik, head of Samsung's investor relations team in a presentation to analysts.
Among the company's four main business areas -- digital media, telecommunication, semiconductor, and home appliances -- it was the first of those that scored the highest sales.
Sales in the company's digital media sector hit a record 9.4 trillion won and operating income was 292.8 billion won during 2001 thanks to "great reception of flagship products such as LCD (liquid crystal display) monitors and DVD (digital versatile disc) players," said Chu.
In the telecommunication sector, which is focused on cellular handsets, sales were 9.7 trillion won. Operating income in the sector, at 1.4 trillion won, accounted for more than half of all operating income recorded by Samsung during the year.
The company said it shipped 28.6 million handsets during 2001, up 31 percent on the year, for a 7.4 percent share of the world market. For the coming year, the company said it hopes to ship 32 million units for a 7.7 percent share of the world market, which is estimated to grow to 415 million units.
Samsung's semiconductor sector, which has been battered by low DRAM (dynamic RAM) memory prices, saw sales reach 8.9 trillion won while the sector recorded an operating profit of 698.3 billion won. Despite the problems of 2001, the company said it has witnessed a turn around in the latter part of the year thanks to increasing memory chip prices and has seen much lower losses in the fourth quarter than those recorded in the first quarter. The company estimated the global DRAM market declined 60 percent year-on-year in 2001.
In the last two months, DRAM spot market prices have tripled and Samsung says the contract prices it charges major customers have also moved very close to the spot price.
Home appliance sales reached 3.0 trillion won and operating income was 182.9 billion won.
Looking ahead, Samsung Electronics said it expects a small pickup in sales in 2002 with group sales increasing 2 percent to 42 trillion won. Capital expenditure will decline to 3 trillion won in 2002 from 4.2 trillion won in 2001, said the company.