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2016 3Q Earnings Release

2016-10-27
2016 3Q Earnings Release

Sales: KRW 1.4673 trillion, Operating profit: KRW 12.8 billion
- Sales decreased by 9% from the 2nd quarter of 2016 and the 3rd quarter of 2015
- Operating profit decreased by 15.8% from the 2nd quarter of 2016 and 87.4% from the 3rd quarter of 2015

In the 4th quarter of 2016, Samsung Electro-Mechanics plans to build the basis for its 2017 business expansion through an expansion of parts supply to Chinese customers, expansion of M/S for major customers, enhancement of resource input efficiency, and reinforcement of quality and manufacturing competitiveness.

On November 27, Samsung Electro-Mechanics announced that it recorded KRW 1.4673 trillion in sales and KRW 12.8 billion operating profit based on the consolidated financial statements in the 3rd quarter of 2016. According to the announcement, the sales decreased by 9% from the 2nd quarter of 2016 and the 3rd quarter of 2015. Meanwhile, the operating profit decreased by 15.8% from the 2nd quarter of 2016 and 87.4% from the 3rd quarter of 2015.


Samsung Electro-Mechanics explained that despite its internal efforts for yield improvement and cost reduction, its management indices decreased because of the reduction of the demand for flagship smartphone components from major customers and the impact of exchange rate reduction.

※ Performance of Each Division and Promotion Strategy

[Digital Module] The sales of the digital module recorded KRW 658.5 billion, a 10% decrease from the last quarter, due to the impact of flagship model demand reduction from major customers. In the 4th quarter, Samsung Electro-Mechanics plans to diversify its customers through the development of a dual-camera module with differentiated performance and to expand the supply of high-pixel and high-performance products, in accordance with the increase in the demand for high-end camera modules from Chinese customers.


[Chip Parts] The sales of the small-sized and high-capacity MLCC (multilayer ceramic capacitor) to Chinese customers increased, but the sales of chip parts only recorded KRW 450.8 billion, an 11% decrease from the last quarter, due to the impact of flagship model demand reduction from major customers. Samsung Electro-Mechanics plans to strengthen its MLCC business competitiveness through the operation of a high-efficiency innovation line in its new Philippine plants, as well as to actively secure new customers for industrial and electronic products through the expansion of its high-reliability product lineup.


[Board] Sales had recorded KRW 327.8 billion, a 5% decrease from the last quarter, due to the sales decrease of AP package board for major customers.
Samsung Electro-Mechanics plans to expand the M/S of the mobile AP package mainboard for Chinese customers by developing low-cost technology as well as to secure its business competitiveness through the expansion of the ratio of production in Vietnam for smartphone aboards.


※ Quarterly Management Performance

(Unit: KRW 100 million)

Category 2015 2016 QoQ YoY
3Q 2Q 3Q
Sales 16,095 16,164 14,673 1,491↓ 1,422↓
Operating Profit 1,015 152 128 24↓ 887↓
Pre-Tax Profits 1,071 408 51 357↓ 1,020↓
Net Profits △91 165 22 143↓ 113↑

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