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2018 4Q Earnings Release2019-01-29
1.9981 trillion won in revenue, 252.3 billion won in operating profit
- 16% decline in revenue, 38% decline in operating profit compared to previous quarter (‘18.3Q)
- Affected by seasonal decline and inventory adjustment
- 16% increase in revenue, 136% increase in operating profit compared to same quarter last year (‘17.4Q)
8.1930 trillion won in annual revenue, 1.0181 trillion won in annual operating profit for 2018
- First time since company’s founding that annual operating profit exceeded 1 trillion won
Samsung Electro-Mechanics announced on the 29th that it has generated 1.9981 trillion won in revenue and 252.3 billion won in operating profit for 4Q on a consolidated basis.
While revenue fell by 368.2 billion won (16%) and operating profit fell by 152.7 billion won (38%) compared to the previous quarter, revenue increased by 281.1 billion won (16%) and operating profit increased by 145.5 billion won (136%) as compared to the same quarter last year.
Samsung Electro-Mechanics explained that demand for main products such as MLCC (Multi-Layer Ceramic Capacitor) for IT uses, camera modules, and RFPCB (Rigid Flex Printed Circuit Board) fell due to the effects of the 4Q seasonal decline, leading to a decline in results compared to the previous quarter.
For 2018, the company recorded 8.1930 trillion won in annual revenue and 1.0181 trillion won in annual operating profit. This is a 20% increase in revenue and 233% increase in operating profit compared to the previous year. Revenue exceeded 8 trillion won for the first time in 5 years since 2013 (8.2566 trillion won in revenue), and this is the first time in the company’s history that operating profits exceeded 1 trillion won.
For this year, the policy is to establish a foundation for sustainable growth by diversifying our customer base to include the automotive and industrial sectors, in addition to discovering new business opportunities in areas such as 5G, AI, and autonomous driving.
※ Results by Business Area and Forecasts
Component Solution Business Unit 4Q revenue was 896.1 billion won, representing a 13% reduction compared to the previous quarter and a 29% increase compared to the same quarter last year.
While sales of high-reliability MLCC for automotive and network equipment use increased, declining demand by main mobile customers resulted in a drop in the supply of MLCC for IT use.
With the expansion of utilizing products such as 5G and AI, demand for high-value MLCC is expected to increase.
Samsung Electro-Mechanics plans on continuing to grow revenue by expanding its supply capabilities for automotive/industrial MLCC, an area where supply shortages persist.
Module Solution Business Unit Recorded revenues of 687.3 billion won, representing a 22% decline compared to the previous quarter and an 18% increase compared to the same quarter last year.
While revenue grew compared to last year due to the expanded supply of advanced multi-cameras, the drop in camera and communications module supply due to the seasonal decline resulted in a drop in revenues as compared to the previous quarter.
Going forward, the camera module market is expected to expand its use of advanced cameras with features such as high pixel counts and optical zoon. Furthermore, demand for 5G antenna modules utilizing new materials and forms is expected to increase due to the adoption of 5G, so Samsung Electro-Mechanics plans on becoming a pioneer in this new market by acquiring core technologies such as packaging methods.
Substrate Solution Business Unit 4Q revenue was 381.8 billion won, representing a 12% reduction compared to both the previous quarter and the same quarter last year. Sales of OLED RFPCB and smartphone mainboards fell, and package substrate revenues fell as well due to a decline in PC CPU supply.
The plan is for the substrate business to diversify its customer base to include Chinese smartphone companies that are expanding their use of OLED displays, while the profitability of package substrates will be improved by increasing the proportion of high value products such as automotive, network, and AI products.
[Unit: 100 million won]
|Earnings Before Tax||2,377||3,687||36↓||9,404||795||199↑||2,535|