Lowered Performances
Except for Samsung Electronics, major affiliates of Samsung Group will see the drop in operating profits in the fourth quarter, compared to the previous year.
According to financial information provider WISEfn on Jan. 10, Samsung’s 12 affiliates, except for Samsung Electronics and Samsung Fine Chemicals, are likely to post a total of 839.2 billion won (US$699.62 million) in operating profits in the fourth quarter last year. The figure is a 30.18 percent, or 362.7 billion won (US$302.38 million) drop from a year earlier.
In particular, their operating profits are on the decrease. Their total operating profits amounted to 899.2 billion won (US$749.65 million) three months ago, up 6.67 percent, or 60 billion won (US$50.02 million) compared to the current figures.
By affiliate, Samsung Life Insurance will turn to a loss after recording 54.6 billion won (US$45.52 million) of operating losses in the fourth quarter. During the same period, Samsung Card is expected to see a 71.65 percent decrease to 103.8 billion won (US$86.54 million) in operating profits. Samsung SDI, a unit of Samsung Electronics, is also highly likely to post 1.7 billion won (US$1.42 million) in operating losses, though it was expected to make 18.6 billion won (US$15.51 million) of operating profits three months ago. Samsung SDS will also record an operating profit of 181.2 billion won (US$151.06 million), down 2.99 percent from the previous quarter. Samsung Heavy Industries and Samsung Engineering, which suffer from financial problems, are likely to post 48.7 billion won (US$40.6 million) and 9.8 billion won (US$8.17 million) in operating profits, respectively, showing a 52.1 percent and 55.32 percent decrease.
Although about half of Samsung’s major affiliates are expected to record a fall in their performances, some of them will see an improvement in their sales results. Samsung Electro-Mechanics is highly likely to have the base effect of last year for two months in a row in the fourth quarter. The estimated operating profit of Samsung Electro-Mechanics in the fourth quarter amounts to 70.3 billion won (US$58.61 million), up 104.08 percent from same period a year ago.
Due to lower selling and administrative expenses, higher appraisal profits of equity linked securities and maintaining trading values of over 8 trillion won (US$6.67 billion), Samsung Securities will see a 74.15 percent increase in operating profits to 82.3 billion won (US$68.61 million). Samsung Fire & Marine Insurance will post 261 billion won (US$217.59 million) in operating profits in the fourth quarter, up 51.13 percent, thanks to the improvement in loss ratio.
In addition, Hotel Shilla is expected to produce an operating profit of 38.6 billion won (US$32.18 million), showing a 45.51 percent increase, during the same period, while Cheil Worldwide will record 43.9 billion won (US$36.6 million) in operating profits, up 12.35 percent. The figure of S1 will grow 4.85 percent to 55.8 billion won (US$46.52 million).