SEOUL, Jan. 31 (Korea Bizwire) — Samsung Electronics Co. said Wednesday that its board of directors has approved a 50:1 stock split due to record highs in sales and operating profits in the fourth quarter on rising chip demand.
Net profit came to 12.25 trillion won (US$11.4 billion) in the October-December period, compared with 7.08 trillion won a year earlier, the company said in a regulatory filing.
For the whole of 2017, net profit came to 42.18 trillion won, up 85.6 percent from a year earlier.
The South Korean tech giant said its operating profit hit a quarterly record of 15.15 trillion won in the fourth quarter. Operating profit is in line with Samsung’s earnings guidance released earlier this month, which estimated operating profit at 15.1 trillion won.
Sales rose 23.7 percent to 65.9 trillion won in the October-December period from a year earlier, also marking a quarterly record.
For all of 2017, sales and operating profit came to 239.5 trillion won and 53.65 trillion won, respectively, up 18.6 percent and 83.4 from a year earlier, respectively.
Samsung Electronics said operating profits in semiconductor businesses came to 35.2 trillion won in the fourth quarter, accounting for 65.6 percent of its total operating profit in the cited period.
Samsung Electronics attributed the strong earnings to robust chip demand and increased sales of flexible organic light-emitting diode panels.
The tech giant said that the IT and Mobile Communications division, which covers smartphones, posted an operating profit of 11.83 trillion won in 2017, the highest since 2014, when the comparable figures came to 14.56 trillion won.
Still, Samsung Electronics said its fourth-quarter operating profit in the IT and Mobile Communications division fell to 2.42 trillion won from 3.29 trillion won a quarter earlier on increased marketing costs for its smartphones.
Shares of Samsung Electronics were up 0.20 percent to 2,495,000 won, outperforming the broader KOSPI’s 1.28 percent loss.
Also on Wednesday, Samsung Electronics’ board of directors decided to lower the face value of its stocks from 5,000 won to 100 won, a move that would dramatically increase the number of common stocks to more than 6.41 billion from the current 128.3 million.
The stock split decision is subject to approval at the company’s annual shareholders’ meeting, set to be held March 23.
The move — the first of its kind made by Samsung Electronics — would increase access to Samsung shares by ordinary investors, who in turn could get the benefits of increased dividends.
“The split is also expected to add both liquidity and marketability to the Company’s stock, which may contribute to enhancing corporate value in the long term,” Samsung Electronics said.