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Samsung gears up for challenging year


Samsung posted KRW 53,32-trillion (R720,575-billion) in consolidated revenue and KRW 6.14 trillion (R82, 930 billion) in operating profit for for the fourth quarter that ended on 31 December 2015.
Overall the company reported full-year 2015 revenue of KRW 200.65-trillion (R2,711-trillion) and full-year 2015 operating profit of KRW 26,410trillion (R357,253-billion).
Facing global economic headwinds, including a sharp fall in oil prices, the company’s fourth quarter earnings fell quarter on quarter (QoQ) as the components side of the business was impacted by weakened prices for DRAM chips and LCD panels due to overall softer demand in the IT market and for PCs.
The company is expecting challenges to maintain earnings in 2016, due to a difficult business environment and slowing IT demand. Samsung will strive to improve performance in the second half, by capitalising on strong seasonal demand for set business products and enhancing the product mix in components business.
It will make efforts to secure profitability for each business unit while focusing on reinforcing mid- to long-term business competitiveness, including new business areas such as the Internet of Things (IoT). For IoT, the initial focus will be on Smart Home and Smart Health, leveraging the strength of the overall ecosystem.
For the memory business, the company plans to increase the competitiveness of its products and to solidify its technological leadership by expanding its leading-edge process. As for the System LSI business, the company plans to diversify its foundry customers and enhance the SoC (System-on-Chip) line-up.
In the Display Panel segment, there are plans to secure mid- to long-term growth momentum by leveraging its OLED technology for the development of new panel applications such as transparent, mirror, head-mounted and automotive displays, while strengthening its flexible display technologies.
On the mobile business, we will focus on strengthening the competitiveness of our software, along with hardware, services and wearable products. For the consumer electronics business, we will lead the Smart Home era with diverse IoT-enabled products.
Looking at the first quarter specifically, challenging business conditions will likely remain due to weak seasonal demand and a slowdown in the IT industry. Therefore, the components business will focus on expanding the proportion of value added products, while the set business will focus on major launches of its new products.
Regarding shareholder return, the company announced a KRW 11,3-trillion (R153,064-billion) special buyback program and a three-year shareholder return policy last year. It completed the first phase of the buyback program on 12 January, of which 2,23-million common shares and 1,24-million preferred shares worth KRW 4,25-trillion (R57,570-billion) were repurchased and cancelled.