Samsung profit down 67 percent


Samsung, the biggest stock in Korea, is down again Wednesday after a 5.45 percent slump the day before

SEOUL, South Korea -- Samsung Electronics said Wednesday that its fourth-quarter profits fell 67 percent, year over year.

Sales were down 7 percent for the quarter, which ran through December.

For the whole of 2001, Samsung earned a net profit of 2.9 trillion won ($2.2 billion), down 52 percent from the 6 trillion won it made in 2000.

Total sales for the year were 32 trillion won, only slightly down from the 34 trillion won in revenues it claimed the prior year.

In the fourth quarter, net profit dropped to 400 billion won ($306 million), a dramatic decline from 1.2 trillion won in the fourth quarter of 2000.

Sales were 8.5 trillion won, compared with 9.1 trillion won the same time in 2000.

Slump in chips the main driver

The company said the slump in chip sales was the prime driver in the lower fourth quarter numbers. Its chip operations produced a 212 billion won ($162 million) net loss.

The Seoul-based company said it will cut its plans for revamping and expanding its production in 2002.

It said Wednesday it expects to spend 3 trillion won ($2.3 billion) on capital expenses this year, down from 4.2 trillion won last year.

Samsung is the largest stock listed in South Korea. Its stock was down 1.9 percent at 306,000 won after its earnings, having fallen 5.45 percent the day before.

That dealt the Kospi a blow. It opened higher but fell to a 0.44 percent loss, leaving it at 715.46 shortly before noon. Most other Asian markets were lower.

Hynix creditors looking at debt

Samsung is also the world's largest maker of memory chips. But it faces a larger competitor if industry No. 2 Micron Technology goes ahead with a deal to buy much of the operations of No. 3 Hynix Semiconductor.

Talks are progressing. But Micron has asked Hynix's creditors to write off around 5 trillion won ($3.8 billion) of its huge debt load, according to The Wall Street Journal.

That promises to throw a wrench in the deal. Hynix's 16 banks are mulling the proposal, the newspaper reports.

Memory chip prices fell more than 90 percent in 2001, falling below $1 for a DRAM chip in October.

But they have recovered somewhat this year, and Hynix has been raising prices citing strong computer demand in China.

Samsung, which has also been raising its contract rates, said Wednesday it expects a further improvement in the industry through 2002.