Samsung Electronics posts record earnings in 2017 on strong chip sales

Samsung Electronics posted record-high earnings in the company's history last year due mainly to strong sales of semiconductor, the South Korean company said Wednesday.

Samsung logged 53.65 trillion won (50 billion U.S. dollars) of operating profit in 2017 on revenue of 239.58 trillion won (223.45 billion U.S. dollars). Net income was 42.18 trillion won (39.34 billion U.S. dollars).

All the figures were the biggest ever recorded by Samsung in the company's 80-year history.

Two thirds of Samsung's operating profit stemmed from its chip-making business, of which operating profit reached a new yearly high of 35.2 trillion won (32.83 billion U.S. dollars).

Demand for memory chips got strong last year thanks to the spread of new mobile devices and more usage of big data, which requires more memory chips.

Samsung's smartphone-making unit posted 11.84 trillion won (11.04 billion U.S. dollars) of operating profit in 2017, up from 10.8 trillion won tallied in 2016 when the Galaxy Note7 smartphone was discontinued on battery faults.

During the October-December quarter, Samsung posted an operating profit of 15.15 trillion won (14.13 billion U.S. dollars) on revenue of 65.98 trillion won (61.54 billion U.S. dollars).

The revenue was up 24 percent from a year earlier, while the operating profit jumped 64.3 percent. Both the revenue and the operating were the quarterly highs in Samsung's history.

Net income in the fourth quarter amounted to 12.26 trillion won (11.43 billion U.S. dollars).

The ratio of operating profit to revenue, which reflects Samsung's profitability, stood at 23 percent in the December quarter, up 5.7 percentage points from a year earlier.

Samsung's chip-making business led the record-high earnings in the December quarter. The semiconductor division logged 10.9 trillion won (10.17 billion U.S. dollars) of operating profit on revenue of 21.11 trillion won (19.69 billion U.S. dollars) in the fourth quarter.

The chip unit's operating profit continued to grow from 6.31 trillion won (5.89 billion U.S. dollars) in the first quarter to 8.03 trillion won (7.49 billion U.S. dollars) in the second quarter and 9.96 trillion won (9.29 billion U.S. dollars) in the third quarter respectively.

Samsung's smartphone unit logged an operating profit of 2.42 trillion won (2.26 billion U.S. dollars) in the December quarter.

Operating profits for the display panel division and the consumer electronics unit came in at 1.41 trillion won (1.32 billion U.S. dollars) and 510 billion won (476 million U.S. dollars) respectively in the fourth quarter.

Samsung spent 43.4 trillion won (40.48 billion U.S. dollars) in facilities in 2017, including 27.3 trillion won (25.46 billion U.S. dollars) in semiconductor facility and 13.5 trillion won (12.59 billion U.S. dollars) in display pane facility each.

Meanwhile, Samsung's board of directors approved a 50:1 stock split in an effort to enhance shareholder value, the company said in a statement.

Samsung said it had received numerous requests for a stock split as Samsung's high share price was a hindrance to potential investors.

It would make Samsung shares more accessible and provide dividends to a wider range of investors from this year.

(ASIA PACIFIC DAILY)