Healthy sales of LCD (liquid crystal display) panels and a profitable cellular handset business helped Samsung Electronics post strong net profit growth in the second quarter.
The company on Friday reported net profit during the quarter was 2.1 trillion won (US$2.1 billion), up 51 percent on the same period last year, as revenue climbed 24 percent to 18.1 trillion won.
But the results could have been better and were impacted by falling demand for IT and the general slowdown in the global economy, said Chu Woosik, head of Samsung's investor relations department, in a telephone conference call. He also said Samsung's costs were hit by higher prices for both oil and raw materials.
"Despite these challenges, we posted very strong results," he said.
In the telecom sector, which is the largest of Samsung's four main business areas, sales jumped 27 percent as Samsung racked up cell-phone handset sales of 45.7 million units. That takes total cell phone sales in the first six months of this year to 92 million units, which is a 20 percent jump on last year.
The company's LCD panel business saw sales jump 41 percent on the back of strong demand from TV and laptop PC makers for its displays. Samsung is the world's largest LCD maker and supplies screens to many TV and computer makers. The business is a profitable one for Samsung, which said margins were 21 percent during the quarter. During the second quarter Samsung said it expects the sales volume to grow as the end of year sales period approaches.
Chip sales jumped just 7 percent year-on-year to 4.6 trillion won.
Looking ahead to business performance in the last six months of the year, Chu said, "Its difficult to envisage a sharp recovery in the second half considering the prevailing softness in global demand and rising costs. The business environment is not favorable."
"But one thing is for sure. You may be rest assured the relative competitive gap between us and the rest of the pack will increase in [the third quarter]."