Operating Profits of Samsung SDI in Q2 Reach Just 700 Million Won

The operating profits of Samsung SDI during the second quarter was 700 million won (US$681,996), turning into a surplus from a loss, but this is 97.8 percent less than the same period last year.

Samsung SDI announced on July 28 that during the second quarter, sales were 1.486 trillion won (US$1.445 billion), operating profits 700 million won (US$681,996), and net income 2.05 million won (US$1,997). Sales decreased 19.8 percent, operating profits 97.5 percent, and net income 84.5 percent from last year, so much worse than what the securities industry expected.

As sales of Samsung Electronics’ smartphones are sluggish, small batteries are collapsing. The exchange rate crisis and POP sales decrease were also the main reasons for bad performance.

Securities companies continue to make negative projections. Dongbu Securities worried, “Earning shocks below market expectations are lasting every quarter. Predictability is extremely low, as new businesses are in their entry level, traditional strong businesses are shaking, and declining industries are restructuring.”

In addition, Dongbu examined, “Continuous earning shocks are lowering market credibility, which leads to unpredictable share price changes due to non-business related variables such as issues, stories, and equity value. This is not a good situation.”

NH Investment and Securities also projected that new businesses will take more time to realize profits, which is very negative. NH Investment and Securities explained, “We maintain our investment opinion on Samsung SDI as market average. Growth of operating profits is very limited, since the sluggishness of small secondary cells, contributing a lot to performances, is clear.”

Furthermore, NH Investment and Securities forecasted, “Even with the external growth of electric vehicles (EV) and an energy storage system (ESS), new growth drivers of Samsung SDI, it is very slow to improve profits. In the material fields, separation films and Active Matrix Organic Light Emitting Diodes will need more time to realize profits.”

There were projections that performances will be improved during the third quarter. Hana Daetoo Securities predicted that the external growth of SDI was limited so far, but this will be overcome thanks to M&As, and that profits will be improved in all business sectors.”