South Korea’s Samsung Electronics recorded a net loss for the last three months of 2008, while its net profit for the entire year fell 26 per cent, it said Friday.
The company’s net loss for the last three months of 2008 was 22 billion won (US$15 million) on four per cent lower sales of 18.5 trillion won, said Robert Yi, head of Samsung’s investor relations department in a conference call. Samsung said its full year net profit dropped 26 per cent to 5.5 trillion won, despite a 15 per cent increase in revenue to 73 trillion won.
“Our company could not escape the rapid decline in the global economy,” he said.
Samsung saw revenues fall as a result of lower prices for its mainstay memory chip and flat-panel display products. In the semiconductor sector revenues fell 18 per cent from the third quarter and LCD sales dropped 12 per cent.
As a result both the semiconductor and display business units lost money in the fourth quarter.
A relatively bright spot was Samsung’s cell phone business, which saw shipments expand about 2 percent despite an estimated 5 percent decline in the global handset market. However while Samsung shipped more cell phones, it sold them at lower prices so the average selling price dropped 10 percent, said Yi.
Looking ahead, Samsung didn’t issue sales and profits targets for the current year because it said they are currently too difficult to forecast given the state of the world economy.
However the broader industry-wide guidance it provided wasn’t pretty.
Demand for both DRAM and flash memory chips is expected to drop on lower shipments of personal computers and cell phones. LCD panel demand will also fall because of weak demand for laptops, monitors and televisions. Worse still, in many business units the company expects average selling prices to drop faster than shipments.
Samsung said it sees the global handset market contracting by between five per cent and 10 per cent this year and hopes to ship 200 million phones in 2009, which is roughly unchanged from 2008.
