<TABLE cellSpacing=0 cellPadding=0 width=452 border=0><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published January 24, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Samsung runs up 20b won loss in Q4
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(Seoul)
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</TD></TR><TR class=caption><TD>RECESSION FALLOUT
Samsung's latest loss underlines the challenges facing electronics companies worldwide</TD></TR></TBODY></TABLE>SAMSUNG Electronics, the world's largest manufacturer of flat-screen televisions, memory chips and liquid crystal displays, posted its first ever quarterly loss yesterday as the global economic slump hit prices and demand for mainstay products.
Samsung lost 20 billion won (S$21.7 million) in the three months ended Dec 31, the company said. Samsung posted 2.21 trillion won in net profit a year earlier.
The net loss - Samsung's first since the company began reporting results on a quarterly basis in the third quarter of 2000 - underlines the challenges facing electronics companies worldwide as major economies flounder in recession.
The company has struggled with falling prices for chips and flat screens, as well as the waning consumer appetite that has hit other Asian electronics manufacturers including Japanese giant Sony Corp.
On Thursday, Sony projected its first annual loss in 14 years, while South Korea's LG Electronics Inc reported a record quarterly net loss. Japan's Panasonic Corp said earlier this month it would slash about US$1.5 billion from its planned investment in two new flat-screen TV plants and shut down unprofitable businesses.
Samsung's results showed that 'our company could not escape the rapid decline in the global economy', Robert Yi, vice-president for investor relations, told a conference call.
The result was not as bad as the net loss of 92.93 billion won forecast by an Associated Press survey of 10 analysts. But on an operating basis, the company racked up red ink to the tune of 940 billion won, much worse than the forecast of a loss of 319 billion won. That loss was also a first.
Operating earnings are seen as a direct indicator of core business performance while net profit or loss also reflects taxes, dividends, asset sales and other items.
'The global economic slowdown had an adverse effect on consumer purchases of electronics goods in the fourth quarter, traditionally a strong period for electronics companies,' Samsung said.
Fourth-quarter sales rose to 18.45 trillion won from 17.48 trillion won the year before, but less than the 20 trillion won expected by analysts. Samsung shares fell 4.1 per cent to close at 442,000 won.
On the bright side, Samsung said mobile phone sales rose to a record during the quarter despite a 5 per cent contraction in the global market for handsets. The company, the world's No. 2 mobile phone manufacturer, sold about 200 million handsets in 2008, an increase of 22 per cent from 2007.
The global handset market, however, is expected to shrink further this year, declining to about what it was in 2004, Chi Young- cho, senior vice-president of strategic planning, told the conference call. 'We expect 2009 to be quite challenging compared to any previous years.'
For all of 2008, Samsung said that net profit fell 25.6 per cent to 5.53 trillion won from the year before, while sales rose 15.5 per cent to 72.95 trillion won. -- AP
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Samsung runs up 20b won loss in Q4
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</TD></TR><TR class=caption><TD>RECESSION FALLOUTSamsung's latest loss underlines the challenges facing electronics companies worldwide</TD></TR></TBODY></TABLE>SAMSUNG Electronics, the world's largest manufacturer of flat-screen televisions, memory chips and liquid crystal displays, posted its first ever quarterly loss yesterday as the global economic slump hit prices and demand for mainstay products.
Samsung lost 20 billion won (S$21.7 million) in the three months ended Dec 31, the company said. Samsung posted 2.21 trillion won in net profit a year earlier.
The net loss - Samsung's first since the company began reporting results on a quarterly basis in the third quarter of 2000 - underlines the challenges facing electronics companies worldwide as major economies flounder in recession.
The company has struggled with falling prices for chips and flat screens, as well as the waning consumer appetite that has hit other Asian electronics manufacturers including Japanese giant Sony Corp.
On Thursday, Sony projected its first annual loss in 14 years, while South Korea's LG Electronics Inc reported a record quarterly net loss. Japan's Panasonic Corp said earlier this month it would slash about US$1.5 billion from its planned investment in two new flat-screen TV plants and shut down unprofitable businesses.
Samsung's results showed that 'our company could not escape the rapid decline in the global economy', Robert Yi, vice-president for investor relations, told a conference call.
The result was not as bad as the net loss of 92.93 billion won forecast by an Associated Press survey of 10 analysts. But on an operating basis, the company racked up red ink to the tune of 940 billion won, much worse than the forecast of a loss of 319 billion won. That loss was also a first.
Operating earnings are seen as a direct indicator of core business performance while net profit or loss also reflects taxes, dividends, asset sales and other items.
'The global economic slowdown had an adverse effect on consumer purchases of electronics goods in the fourth quarter, traditionally a strong period for electronics companies,' Samsung said.
Fourth-quarter sales rose to 18.45 trillion won from 17.48 trillion won the year before, but less than the 20 trillion won expected by analysts. Samsung shares fell 4.1 per cent to close at 442,000 won.
On the bright side, Samsung said mobile phone sales rose to a record during the quarter despite a 5 per cent contraction in the global market for handsets. The company, the world's No. 2 mobile phone manufacturer, sold about 200 million handsets in 2008, an increase of 22 per cent from 2007.
The global handset market, however, is expected to shrink further this year, declining to about what it was in 2004, Chi Young- cho, senior vice-president of strategic planning, told the conference call. 'We expect 2009 to be quite challenging compared to any previous years.'
For all of 2008, Samsung said that net profit fell 25.6 per cent to 5.53 trillion won from the year before, while sales rose 15.5 per cent to 72.95 trillion won. -- AP
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