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 was KRW 115.2 billion, down 33% QoQ and 26% YoY, impacted by lower non-operating income and higher income tax.

• Growth was supported by high-end product sales, particularly MLCC, flip chip BGA for AI/server, and automotive camera modules.

Financial highlights

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

• Gross margin held steady at 20.2%, with operating margin at 8.6%, up 0.6 percentage points YoY.

• Cash position improved to 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.

• Pre-tax profit fell 39% QoQ and 27% YoY to KRW 142.8 billion, mainly due to non-operating losses.

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.

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

• High-end FCBGA substrate demand (AI, server, network, automotive) expected to stay solid despite seasonal weakness in smartphones/PCs.

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