Samsung Electro-Mechanics (A009150) Q3 2024 earnings summary

Executive summary

• Q3 2024 revenue reached KRW 2,615.3 billion, up 2% QoQ and 11% YoY, with operating profit at KRW 224.9 billion, up 6% QoQ and 20% YoY, driven by strong demand in AI, server, and automotive sectors.

• Net income for Q3 was KRW 115.2 billion, down 33% QoQ and 26% YoY due to lower non-operating income and higher income tax.

• Revenue for the first nine months of 2024 increased by 18.3% YoY to KRW 7,801.8 billion, with net income attributable to controlling interests at KRW 470.7 billion.

• The company ceased its communications module business in Q3 2024, classifying related results as discontinued operations.

Financial highlights

• Gross margin for Q3 was 20.2%, with operating margin at 8.6%, and for the nine months, gross margin was 19.5% and operating margin 7.9%.

• Q3 net profit was KRW 115.2 billion; pre-tax profit was KRW 142.8 billion.

• Cash and cash equivalents at quarter-end were KRW 2,463.7 billion, up 5% QoQ and 48% YoY.

• Total assets at end-Q3 were KRW 12,603.9 billion, down 1% QoQ but up 10% YoY; equity increased 1% QoQ and 6% YoY.

• EPS for common shares was KRW 6,230, up from KRW 5,597 in the prior year.

Outlook and guidance

• Q4 expected to be seasonally weaker due to IT demand softness and year-end inventory adjustments, but high-end MLCC and flip chip BGA demand for AI, server, and automotive to remain solid.

• 2025 outlook positive, with continued growth in AI, server, and automotive-related products, despite external uncertainties like trade disputes and FX volatility.

• Focus on high-capacitance MLCC for IT/industrial and expanding automotive camera module and substrate supply.

• The company plans to continue investing in capacity expansion and R&D, focusing on high-value products and new applications such as 5G and AI.