Samsung Posts First-ever Quarterly Loss

Jan. 23, 2009
The company accounts for about 20% of South Korea's annual exports.

Due to a sharp fall in the prices of memory chips and flat panels amid slumping demand, Samsung Electronics on Jan. 23 announced its first-ever quarterly loss.The world's largest memory chip maker said it lost 20 billion won (US$14.4 million) in October-December last year, compared with a net profit of 2.21 trillion won a year earlier and a net profit of 1.22 trillion won in the third quarter of 2008.

In the fourth quarter it swung to an operating loss of 940 billion won from an operating profit of 1.78 trillion won a year earlier, while sales were at 18.45 trillion won from 17.48 trillion.

For the full year Samsung Electronics reported a net profit drop of 25% to 5.53 trillion won from 7.43 trillion won in 2007.

"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," the company said.

Samsung Electronics, the flagship of South Korea's biggest business group, has never posted operating or net losses since it started announcing quarterly earnings results in 2000.

It forecast sluggish market growth for the first quarter of this year in the semiconductor and display sectors as spending contracts worldwide. However, it said its telecom business is expected to perform strongly this year, despite slower market conditions in the first quarter.

The company, which employs around 150,000 people in 62 countries, has announced its biggest-ever reshuffle to counter the recession. It has appointed new bosses at five of its eight regional headquarters overseas. The Samsung group has promoted or replaced 25 chief executives, cut executive pay by 20% and slashed other benefits.

The overall group accounts for about 20% of South Korea's annual exports.

Copyright Agence France-Presse, 2009

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