By Kim Tong-hyung
Staff Reporter
The economic turmoil has not been enough to rock the Samsung Group, South Korea's largest conglomerate, which looks to be on course for its most profitable year ever.
Industry watchers are wondering whether 2009 will be the year Samsung touches the 15 trillion won (about $12 billion) mark in net profit. The group's traditional bread-and-butter businesses of electronics, heavy industries, and engineering and construction are firing on all cylinders, and even its previously struggling credit card and chemical units seem now to be in the midst of a lucrative turnaround.
Samsung's net profit peaked in 2004 when it reached 13.6 trillion won, but some industry analysts predict that this year's figure will be about 10 percent higher.
The group's corporate rebuilding project, aimed at diversifying its revenue sources and reducing an over-reliance on its electronics business, is finally beginning to reap results. Samsung has also been putting in stronger efforts to reduce costs, rationalizing its level of investment and tightly controlling labor costs.
Back in 2004, Samsung Electronics, the world's biggest electronics company and the crown jewel of the Samsung empire, accounted for 80 percent of the group's net profit. Samsung Electronics remains as strong as ever, with Nomura Securities increasing the company's projections for operating profit from 3.5 trillion won to 3.82 trillion won. However, analysts believe that Samsung Electronics will account for 60 percent of the group's net profit this year with the business at other Samsung subsidiaries picking up.
Samsung Heavy Industries, Samsung Engineering and Construction, Samsung Fine Chemical, Cheil Industries and Samsung Corning Precision Glass are all gunning for record profits this year. Samsung Life, the country's biggest life insurer, is also expected to finish 2009 on a lucrative note.
A net profit of around 500 billion won seems a reasonable projection for Samsung Credit Card, which lost 1 trillion won in 2004. Samsung Petrochemical ― which dipped in the red in each of the previous three years ― is finally back in the black.
thkim@koreatimes.co.kr
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