Samsung Profit Fell for First Time in 3 Years

Samsung warned earlier this month that its yearly profit would fall for the first time in three years, and this week its results were confirmed.

For the year, Samsung posted a net profit of KRW22.4 trillion ($20.3 billion) on turnover of KRW206.2 trillion ($187.4 billion), which compares with a net profit in the previous year of KRW30.5 trillion ($27.8 billion) on turnover of KRW228.7 trillion ($208.3 billion). In Q4 Samsung reported a net profit of KRW5.3 trillion ($4.8 billion) on turnover of KRW52.7 trillion ($48 billion), which compares with a net profit in the final quarter of the previous year of KRW7.3 trillion ($6.6 billion) on turnover of KRW59.3 trillion ($53.8 billion). 

Samsung said that in Q4 its display panel business saw strong sales of LCD products, helped by an increase in the average selling price brought about by tight supply and strong demand conditions throughout the industry. The display panel unit contributed KRW7 trillion ($6.3 billion) to total turnover in Q4 and earnings improved thanks to increased shipments of premium TV products, such as UHD and curved panels, as well as ultra-large 60″ plus display panels. OLED product shipments and earnings also increased, due to increased shipments of new high-end smartphone panels, including mass-produced flexible display panels. 

The CE Division, which includes the visual display business, posted turnover of KRW14.3 trillion ($12.9 billion). The fourth quarter saw market demand for flat panel TVs grow sequentially by more than 20%, due to increased demand during the year-end peak season. In particular, the growth rate of premium products, such as the UHD and curved TVs, exceeded that of the overall TV market, and overall TV sales increased by 40% from Q3.

Meanwhile, the IT & Mobile Communications division saw its earnings recover, due to increased sales of high-end products, such as the Galaxy Note 4 and a more efficient management of marketing expenditures. Turnover for the IM unit was KRW26.3 trillion ($23.9 billion).