Seoul: Samsung Electro-Mechanics Co., an electronic component affiliate of Samsung Group, reported a 24.1 percent decline in net profit for the first quarter, primarily attributed to a weak local currency. Net income for the January-March period was 141.6 billion won (US$98.4 million), down from 186.5 billion won the previous year, as disclosed in a regulatory filing by the company.
According to Yonhap News Agency, the earnings fell short of market expectations, with analysts' average net profit estimate at 172.2 billion won, based on a survey conducted by Yonhap Infomax, the financial data arm of Yonhap News Agency. The decline in net income was significantly impacted by a foreign exchange loss due to the depreciation of the Korean won against the U.S. dollar.
Despite the drop in net income, Samsung Electro-Mechanics saw a 9.2 percent increase in operating income, reaching 200.6 billion won for the quarter. Revenue also rose by 4.8 percent, amounting to 2.73 trillion won. The company cited increased sales of components for Samsung Electronics' new flagship smartphones and higher demand for automotive multilayer ceramic capacitors (MLCC), which are used in artificial intelligence (AI) and chip packaging solutions for servers, as key factors for the growth in revenue and operating profit.
Looking ahead, Samsung Electro-Mechanics expects continued growth in demand for high-performance products such as MLCC and vehicle components in the second quarter.