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2016 2Q Earnings Release

2016-07-22
2016 2Q Earnings Release

Reached sales amounting to KRW 1,616.4 billion and business profits amounting to KRW 15.2 billion
- Increased its sales by 0.8% and decreased its business profits by 64.6% from the previous quarter (1Q 2016)
- Increased its sales by 0.9% and decreased its business profits by 83.8% from the same time last year (2Q 2015)

In the second half of the year, Samsung Electro-Mechanics is expected to increase its sales of high-value parts with the release of a new flagship smartphone, and that its Chinese partners will show better sales numbers due to its dual camera module.

Samsung Electro-Mechanics announced on the 22nd that it recorded KRW 1,616.4 billion in sales and KRW 15.2 billion in business profits in the second quarter on a consolidated basis.
Its sales slightly increased from the previous quarter and the same time last year, and its business profits significantly decreased by 65% compared with the previous quarter and by 84% from the same period last year.


Due to the application of its one-off costs for management efficiency and the falling exchange rate, its business profits were lower than the expectation of the market. However, Samsung Electro-Mechanics announced that its sales slightly rose as it started actively supplying the parts of a new model to its strategic partner companies and increasing the supply of high-pixel camera modules to its Chinese partners.

※ Performance of Each Division and Promotion Strategy

The [Digital Module] Division showed an increase in the sales of the camera modules to Chinese partners and the Wi-Fi modules with the camera modules equipped with the dual pixel image sensor to strategic partners. It reached KRW 731.8 billion in sales, an increase of 7% from the previous quarter. For the third quarter, Samsung Electro-Mechanics plans to start supplying its dual camera modules to its Chinese partners and to expand its supply to them of high-end products with high pixel density and enhanced functions.


The [Chip Parts] Division experienced an increase in its sales of new models and multilayer ceramic capacitors (MLCCs) for industrial use and electronic parts to strategic partners. However, due to the inventory control by its overseas customers, it reached only KRW 505.3 billion in sales, a decrease of 3.8% compared with the previous quarter.
In the second half of this year, it plans to build an innovation line with high efficiency in a new plant in the Philippines, which is expected to be completed by the third quarter, as well as to release a new-generation model to improve the competitiveness of the MLCC business.
In addition, it plans to focus on the promotion of the electromagnetic compatibility (EMC) business by enhancing a new lineup such as an ultra-small, high-frequency inductor.


The [Board] Division increased its sales of main boards for popular smartphones and boards for memories but decreased its sales of package boards for CPUs due to a weak demand of PCs. It generated KRW 344.3 billion in sales, a decrease of 0.5% from the previous quarter. It plans to improve its profitability by increasing its production of main boards for smartphones in other countries, and growing the ratio of M/S and high-value products for package boards by generating a new model for its overseas customers at the right time.


※ Quarterly Management Performance

(Unit: KRW 100 million)

Category 2015 2016 QoQ YoY
2Q 1Q 2Q
Sales 16,021 16,043 16,164 121↑ 143↑
Operating Profit 941 429 152 277↓ 789↓
Pre-Tax Profits 1,905 452 408 44↓ 1,497↓
Net Profits 2 313 165 148↓ 163↑

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