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2019 2Q Earnings Release

2019-07-24
Samsung Electro-Mechanics, 2019 2Q Earnings Release

1.9577 trillion won in revenue, 145.2 billion won in operating profit
- 8% increase in revenue, 30% decrease in operating profit compared to same quarter last year (‘18.2Q)

Expanded component supply anticipated for the second half of the year due to new product releases by main customers
- MLCC inventory exhaustion continues, expansion of high-end IT MLCCs and automotive MLCCs
- Expanded supply of high-spec camera modules and 5G related components

Samsung Electro-Mechanics has generated 1.9577 trillion won in revenue and 145.2 billion won in operating profit for 2Q on a consolidated basis.
Revenue increased by 147.9 billion won (8.2%) and operating profit decreased by 61.6 billion won (29.8%) as compared to the same quarter last year, while revenue decreased by 166.6 billion won (7.8%) and operating profit decreased by 97.3 billion won (40.1%) as compared to the previous quarter.


While Samsung Electro-Mechanics saw revenues grow as compared to the same period last year due to new supplies of high performance camera modules and automotive MLCCs to China along with expanded sales of package substrates, a slowdown in the IT market and delays in the recovery of MLCC demand has resulted in weaker sales performance as compared to last quarter.


Demand is expected to improve in the second half of the year due to new product releases by main customers and the expansion of the automotive and industrial markets. Samsung Electro-Mechanics plans on expanding the supply of high-end IT MLCCs and high-reliability automotive MLCCs, in addition to expanding sales of camera modules with advanced specifications such as high resolutions and optical zoom.
Samsung Electro-Mechanics will also actively respond to increasing demand for 5G related components such as communications modules and package substrates.



※ Results by quarter

[Unit: 100 million won]

Category 2019 Compared to previous quarter 2018 Same quarter last year Comparison
Q2 Q1 Q2
Revenue 19,577 21,243 7.8%↓ 18,098 8.2%↑
Operating Profit 1,452 2,425 40.1%↓ 2,068 29.8%↓
Earnings Before Tax 1,192 2,242 46.8%↓ 1,817 34.4%↓
Net Profit 3,036 1,298 133.9%↑ 1,220 148.9%↑


※ 2Q Results by Business Area and Forecasts

Component Business Unit recorded 781.6 billion won in revenue for 2Q, representing a 10% reduction compared to the same quarter last year and a 7% compared to the previous quarter, due to slow demand by main IT customers.
MLCC sales are expected to partially improve in the second half of the year due to seasonal increases in demand. For the continuously growing automotive MLCC segment in particular, the supply of high-value products is expected to continue in the second half of the year due to a stronger product lineup and enhanced supply capabilities.


Module Business Unit recorded 811.2 billion won in revenue for 2Q, representing a 33% increase compared to the same quarter last year but a 15% decrease compared to the previous quarter.
Increasingly high-end specifications for camera modules is expected to continue for the second half of the year as camera modules are the main point of differentiation for smartphones. Samsung Electro-Mechanics intends to expand its market position in the high-value camera module segment, which includes products such as high-resolution and high magnification optical zoom camera modules, by utilizing Samsung Electro-Mechanics’ strength of manufacturing its own parts such as lenses and actuators.


Substrate Business Unit recorded 346.8 billion won in revenue, representing a 16% increase compared to the same quarter last year and a 5% increase compared to the previous quarter, due to the expanded supply of package substrates for CPU and mobile AP use.
The supply of RFPCBs for OLED use is expected to increase in the second half of the year due to the release of new products by main customers. For package substrates, there are plans to increase the proportion of new products with high specifications for GPU, automotive, and network use.



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