Samsung Electronics said its revenue in 2015 amounted to 200.650 trillion won, despite a slowdown in the global IT market. The electronics firm’s annual sales exceeded 200 trillion won for the fourth year in a row.
The company, however, said the new year will be worse than last year in terms of sales because the global economy continues to be in the doldrums.
In the last quarter of 2015, the electronics giant said its sales amounted to 53.320 trillion won, with 6.140 trillion won in operating profit. Quarterly sales were up 3.16 percent over the preceding quarter and operating profit was down 16.92 percent from the previous quarter.
Samsung Electronics, which recorded lower-than-expected results in the last quarter of 2015, is likely to record sluggish sales in the first quarter of this year, analysts said on Jan. 26.
Samsung Electronics operating profit in the last quarter was estimated to be 6.3 trillion won ($5.3 billion), down 15 percent from the preceding three months, and short of the targeted 6.4 trillion won, according to a Meritz Securities estimate.
The nation's largest electronics company fared relatively poorly across the board, except for consumer electronics, which enjoyed a sales boost during the Black Friday season, it said.
The company's operating profit is expected to fall further to 5.8 trillion won in the next three months, the report said, adding that the earlier-than-scheduled release of the S7 smartphone would boost its IT sales, but other sectors, such as semiconductors and displays, would remain sluggish.
Operating profit in the semiconductor sector was estimated to fall from 3.2 trillion won to 2.9 trillion won, and that of displays would fall 100 billion won to 400 billion won, Meritz Securities said.
For the mobile business, the company will focus on strengthening the competitiveness of its software, along with hardware, services and wearable products. For the consumer electronics business, the company plans to lead the Smart Home era with diverse IoT-enabled products.
Looking at the first quarter specifically, challenging business conditions will likely remain due to weak seasonal demand and a slowdown in the IT industry. Therefore, the components business will focus on expanding the proportion of value added products, while the set business will focus on major launches of its new products.
Regarding shareholder return, the company announced an 11.3 trillion won special buyback program and a three-year shareholder return policy last year. It completed the first phase of the buyback program on Jan. 12, of which 2.23 million common shares and 1.24 million preferred shares worth 4.25 trillion won were repurchased and cancelled.
Capital expenditure (CAPEX) for 2015 totaled 25.5 trillion won, including 14.7 trillion won and 4.7 trillion won for semiconductors and displays, respectively. The 2016 CAPEX plan remains under review.
The Semiconductor business registered 2.80 trillion won in operating profits on consolidated revenue of 13.21 trillion won for the quarter.
In the fourth quarter, weak demand across certain markets, including PCs, impacted the memory business’s overall revenue, but sales of mobile and server DRAM were solid.
Growing demand for solution products helped lift NAND demand for high-density mobile devices and enterprise SSD for servers and PCs that require greater storage.
System LSI’s profits improved QoQ, driven by the 14-nm foundry business, despite weaker seasonal demand for SoC and LSI (Large-Scale Integration) chips.
Looking ahead in 2016, demand for memory chips will increase due to growth in contents stored in high density servers featuring DRAM and SSD, as well as smartphones with more advanced features.
Samsung will maintain its leadership in the market and drive sales with differentiated, high value-added products. To this end, the company will expand 20-nm process migration and develop 10-nm class process in DRAM. For NAND, production of third-generation V-NAND and SSD products will be expanded to enhance competitiveness. In System LSI, Samsung will continue pursuing customer diversification and expanding its product line-up to achieve long-term growth.
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