Samsung Electronics' operating profit posts double-digit growth in 2020
Source: Xinhua | 2021-01-29
Samsung Electronics, South Korea's tech behemoth, posted a double-digit growth in its operating profit last year as the COVID-19 pandemic lifted demand for tech products, the company said Thursday.
Consolidated operating profit reached 35.99 trillion won (32.3 billion U.S. dollars) in 2020, up 29.6 percent from the previous year. It was the fourth-biggest profit in the company's history.
Revenue gained 2.8 percent over the year to 236.81 trillion won (212.3 billion U.S. dollars) in 2020, and net income jumped 21.5 percent to 26.41 trillion won (23.7 billion U.S. dollars).
The double-digit growth in profit came as the COVID-19 pandemic encouraged people to attend online classes and work from home, raising demand for tech products especially in the second half.
The earnings were relatively low in the first half amid a global economic slump, caused by the pandemic.
For the October-December quarter, Samsung's operating profit amounted to 9.05 trillion won (8.1 billion U.S. dollars), up 26.4 percent compared to the same quarter of 2019.
Revenue expanded 2.8 percent over the year to 61.55 trillion won (55 billion U.S. dollars) in the fourth quarter, and net income soared 26.4 percent to 6.61 trillion won (5.9 billion U.S. dollars).
Samsung's semiconductor business logged an operating profit of 3.85 trillion won (3.4 billion U.S. dollars) on revenue of 18.18 trillion won (16.3 billion U.S. dollars) during the fourth quarter.
The company said in a statement that overall demand for memory chips remained strong thanks to robust mobile demand and solid demand from data centers and PCs, but it noted that earnings declined owing to the weak U.S. dollar and the initial costs associated with ramping up new production lines.
Samsung forecast that earnings would fall in the first quarter of this year on a quarterly basis due to the continued weakness in the dollar and the costs related to the ramp-up of new production lines, but it said business activities, delayed by the COVID-19 pandemic, would regain momentum for the whole year of 2021.
The display panel division posted an operating profit of 1.75 trillion won (1.6 billion U.S. dollars) on revenue of 9.96 trillion won (8.9 billion U.S. dollars).
It was the highest-ever quarterly earnings thanks to an ongoing recovery in demand for smartphones and TVs amid an economic rebound during the second half of last year, Samsung said.
The company expected mobile display earnings to weaken in the first quarter on a quarterly basis amid an expected low demand from major customers.
The IT & mobile communications unit, which produces mobile phones, recorded an operating profit of 2.42 trillion won (2.2 billion U.S. dollars) on revenue of 22.34 trillion won (20 billion U.S. dollars) in the fourth quarter.
Overall market demand for mobile phones was lifted by strong year-end demand and gradual economic recovery, but both revenue and profit reduced on a quarterly basis amid intensifying competition and higher marketing costs.
Samsung forecast that demand for smartphones and tablets would weaken in the first quarter amid weak seasonality.
The consumer electronics division logged an operating profit of 820 billion won (733 million U.S. dollars) on revenue of 13.61 trillion won (12.2 billion U.S. dollars) in the October-December quarter.
The sale of consumer electronics improved in the fourth quarter due to solid year-end demand in advanced markets, and the overall TV market was forecast to grow in the first quarter despite soft seasonal demand, Samsung noted.
Samsung's capital expenditure in 2020 totaled 38.5 trillion won (34.4 billion U.S. dollars), including 32.9 trillion won (29.4 billion U.S. dollars) spent on semiconductors and 3.9 trillion won (3.5 billion U.S. dollars) on displays.
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