SEOUL, July 30 (Xinhua) -- Samsung Electronics, South Korea's tech giant, saw a double-digit growth in its second-quarter operating profit as the COVID-19 outbreak increased demand for semiconductors used for data center and PCs, the company said Thursday.
Consolidated operating profit amounted to 8.15 trillion won (6.8 billion U.S. dollars) in the April-June quarter, up 23.5 percent from a year earlier. It marked the highest profit since the fourth quarter of 2018.
The spread of COVID-19 caused closures and slowdowns at stores and production sites around the world, but the profit advanced in double figures thanks to the firm demand for memory chips and appliances as well as a one-off gain at the display panel business, Samsung said.
A partial recovery in global demand since May also helped offset some COVID-19 effects, resulting in a higher profit than initially expected, the company noted.
Revenue slipped 5.6 percent over the year to 52.97 trillion won (44.4 billion U.S. dollars) in the second quarter due to reduced sales of smartphones and other devices.
However, net income grew 7.2 percent from a year earlier to 5.56 trillion won (4.7 billion U.S. dollars) in the quarter.
The ratio of operating profit to revenue stood at 15.4 percent in the second quarter, marking the highest since the fourth quarter of 2018.
The chip-making division posted an operating profit of 5.43 trillion won (4.5 billion U.S. dollars) on revenue of 18.23 trillion won (15.3 billion U.S. dollars).
The semiconductor business's operating profit accounted for two-thirds of the company's total profit thanks to solid demand from data centers and PCs.
The COVID-19 pandemic encouraged people to work at home and attend online classes, causing demand for chips used for PCs and other devices.
Demand slowed for mobile memory chips, while system LSI reported lower earnings amid weakness in the mobile market.
The mobile phone-producing unit logged an operating profit of 1.95 trillion won (1.6 billion U.S. dollars) on revenue of 20.75 trillion won (17.4 billion U.S. dollars).
The solid profitability was attributed to marketing cost reductions and other cost optimization that offset weak sales of smartphones.
The consumer electronics unit, which manufactures TVs and home appliances, recorded an operating profit of 730 billion won (611.6 million U.S. dollars) on revenue of 10.17 trillion won (8.5 billion U.S. dollars).
The higher earnings came amid growing sales of appliances such as air conditioners and dryers as well as premium TVs including QLED models.
The display panel business posted an operating profit of 300 billion won (251.3 million U.S. dollars) on revenue of 6.72 trillion won (5.6 billion U.S. dollars).
The profit was caused by a one-off gain that boosted profit from mobile display panels, while the unit's losses from larger panels narrowed slightly on increased sales of monitors.
Samsung expected a gradual recovery in demand for mobile devices and consumer electronics in the second half of this year, but it cautioned about risks such as persisting uncertainties from the COVID-19 outbreak and growing competition.
In the April-June quarter, Samsung's capital expenditure reached 9.8 trillion won (8.2 billion U.S. dollars), including 8.6 trillion won (7.2 billion U.S. dollars) spent on semiconductors and 800 billion won (669.8 million U.S. dollars) on displays.
The total capital expenditure in the first half amounted to 17.1 trillion won (14.3 billion U.S. dollars), including 14.7 trillion won (12.3 billion U.S. dollars) for semiconductors and 1.6 trillion won (1.3 billion U.S. dollars) for displays. Enditem