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2016 4Q Earnings Release2017-01-25
Sales of KRW 1.34 trillion and operating loss of KRW 46.5 billion in the 4Q of 2016
- Sales decreased YoY (4Q of 2015) by 1% and by 8% compared with the previous quarter (3Q of 2016).
- Sales of high value-added parts decreased due to the discontinuation of flagship models by strategic partners.
2016’s yearly sales of KRW 6.33 trillion and operating profit of KRW 24.4 billion
Expansion of sales towards Chinese customers in 2017 and operation of new plant overseas
Strengthening business competitiveness Focusing on businesses
for future growth such as next-generation packaging and vehicle electric parts
On January 25, Samsung Electro-Mechanics announced that it recorded sales of KRW 1.34 trillion and an operating loss of KRW 46.5 billion, based on its consolidated financials for the 4th quarter of 2016. Sales grew by 1% and 8%, respectively, compared to the same periods last year (4Q of 2015) and the previous quarter (4Q of 2016).
According to Samsung Electro-Mechanics, its sales fell due to the decline in sales of high value-added parts following the discontinuation of the flagship model of strategic customers and price cuts.
Meanwhile, the 2016 sales and operating profit came in at KRW 6.33 billion and KRW 24.4 billion, respectively, on a yearly basis, whereas sales fell 92% YoY due to the decrease in demand from strategic customers and the increased costs for improving management efficiency.※ 4th Quarter Earnings and Strategy
[Digital Module] Sales fell in the 4Q by 12% from the previous quarter to KRW 582 billion, while supply increased slightly due to the increased sales of high-end products, such as dual camera modules and automotive modules, to major Chinese customers.
[Chip Parts] Sales decreased slightly from the previous quarter to KRW 447.7 billion. Despite a decline caused by the decreased demand for high value-added products from strategic customers, sales increased YoY, thanks to the sales growth of high-end MLCCs (multilayer ceramic capacitors) in China and major customers.
[Board] The division recorded sales of KRW 297.9 billion, which is down by 10% from the previous quarter due to the discontinuation of the flagship model of strategic partners as well as the inventory adjustments of overseas customers due to the decline in PC shipments.
Samsung Electro-Mechanics plans to increase the supply of parts for new models of strategic partners and expand sales by diversifying products such as dual camera modules, MLCC, EMC, and PCB to major customers in China. In addition, Samsung Electro-Mechanics will strengthen the competitiveness of its MLCC business with the full-fledged operation of new facilities overseas such as in the Philippines and China. It will also strategically increase the supply of RF-PCB (rigid-flex printed circuit board) for high-end products.
Samsung Electro-Mechanics also plans to expand its automotive components business by strengthening product lineups such as system modules as well as high-reliability and high-capacity MLCCs. In particular, Samsung Electro-Mechanics proclaims to mark 2017 as the year of the PLP (next-generation panel-level packaging technology) business initiation. This is also the year that the company plans to expand its business to the fields of automobile and IoT.
※ Quarterly Management Performance
(Unit: KRW 100 million)