Samsung Electronics Hits the 10 Trillion Won Mark in Net Profit Last Year

Samsung Electronics hits the 10 trillion won mark in annual net profit last year for the first time among Korean companies. However, it is reported that the company’s revenue and profit in the fourth quarter of last year (October to December) decreased from the previous quarter because of the dollar depreciation (the won appreciation).

Samsung Electronics announced on January 14 that it posted 57,632.4 billion won in revenue last year, a 32 percent increase from 2003, while recording 12,016.9 billion won in operating profit and 10,786.7 billion won in net profit, 67 percent and 81 percent up from the previous year, respectively.

In terms of the dollar, the net profit of 2004 is $10.330 billion, meaning the company joined the rank of “$10 billion club” for the first time.

As of 2003, only nine corporations in the world posted more than $10 billion in net profit, including Exxon Mobil ($21.510 billion) and Citigroup ($17.850 billion). In particular, Toyota Motors ($10.280 billion) was the only manufacturing firm among the nine companies.

However, Samsung Electronics’ revenue in the fourth quarter of 2004 remained at 13,895.3 billion won, a 3.1 percent decrease from the third quarter (July to September). Both operating profit (1,532.6 billion won) and net profit (1,825.4 billion won) fell by 44.1 percent and 32.1 percent from the previous quarter, respectively.

Managing Director Choo Woo-shik, the IR team leader of the company, explained, “We saw decreased revenue and increased marketing and R&D expenses in the fourth quarter of last year, with the won appreciation and the drop in LCD prices, which led to profit decrease. ”

Joong-Hyun Park sanjuck@donga.com legman@donga.com