Samsung Fire & Marine Insurance Co Ltd (XKRX:000810) Q4 2024 Earnings Call Highlights: ...

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Mon, Apr 21, 2025, 3:32 PM 4 min read

Revenue: Declined 4% quarter on quarter to KRW75.8 trillion; annual revenue reached KRW300.9 trillion.
Operating Profit: KRW6.5 trillion, down KRW2.7 trillion quarter on quarter.
Operating Margin: Decreased 3% points to 8.6%.
SG&A Expenses: Increased to KRW22 trillion, up by KRW1.2 trillion quarter on quarter.
CapEx: Increased by KRW5.4 trillion to KRW17.8 trillion quarter over quarter; annual CapEx for 2024 was KRW53.6 trillion.
Free Cash Flow: KRW19.9 trillion.
Shareholder Return Pool: Approximately KRW9.9 trillion, with a quarterly dividend of KRW363 for common stock and KRW364 for preferred stock.
Smartphone Shipments: 52 million units; smartphone ASP was $260.
Tablet Shipments: 7 million units.

Warning! GuruFocus has detected 2 Warning Sign with XKRX:000810.

Release Date: February 12, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

Samsung Fire & Marine Insurance Co Ltd (XKRX:000810) achieved its second-highest annual revenue ever in 2024, reaching KRW300.9 trillion.
The company reported a 3% increase in revenue for the DS Division, driven by high value-added memory products for servers.
Samsung Fire & Marine Insurance Co Ltd (XKRX:000810) announced a share repurchase program valued at KRW10 trillion to enhance shareholder value.
The company is focusing on expanding its high value-added product portfolio, including HBM, DDR5, and LPDDR5x, to strengthen its market position.
Samsung Fire & Marine Insurance Co Ltd (XKRX:000810) is committed to sustainability, incorporating recycled materials in its Galaxy S25 series and launching a new Galaxy Trade-In Program.

Negative Points

The company's revenue declined by 4% quarter on quarter to KRW75.8 trillion, with a notable decrease in the DX Division due to rising competition and fading launch effects of new smartphone models.
Operating profit fell by KRW2.7 trillion quarter on quarter, impacted by soft market conditions and increased R&D expenditures.
The outlook for the first quarter of 2025 is limited by ongoing weakness in the semiconductor business.
SG&A expenses increased to KRW22 trillion, reflecting a rise in expenditures as a percentage of sales.
The company faces challenges from geopolitical uncertainties and export controls, which may impact demand for its products, particularly in the semiconductor sector.

Q & A Highlights

Q: Can you share details on the execution plan for the remaining KRW7 trillion of the KRW10 trillion share repurchase program announced in November 2024? A: We plan to repurchase KRW10 trillion worth of shares over 12 months, starting with KRW3 trillion. Details for the remaining KRW7 trillion, including timing and method, are under review. We are committed to enhancing shareholder value and will share more details soon.

Q: Could you provide more details on DRAM and NAND, including big growth, ASP, and operating profit? A: In Q4, DRAM big growth was down by low teens percentage Q-on-Q, with ASP rising by around 20%. NAND saw a mid-single percentage drop in ASP due to weak demand. Despite record-high sales, increased R&D expenses led to a slight decrease in operating profit Q-on-Q.

Q: What is the outlook for the HBM business, and how might DeepSeek impact it? A: HBM sales grew by 1.9x Q-on-Q in Q4. We plan to ramp up HBM3E production, with full-swing delivery starting from Q2 2025. DeepSeek's impact is uncertain, but we expect a mix of long-term opportunities and short-term risks in the AI market.

Q: How does Samsung view policy risk from the Trump administration, and what are the planned countermeasures? A: We monitor geopolitical developments closely. While specifics are not disclosed, we will leverage our global production capabilities and advanced supply chain management to respond to potential changes and turn challenges into opportunities.

Q: What is the outlook for the Memory market in Q1 2025? A: DRAM bit growth is expected to decline by a high single-digit level Q-on-Q due to weak mobile and PC demand. NAND bit growth is expected to decline by a low teens percentage Q-on-Q. We plan to accelerate conversion to advanced nodes and focus on high-value-added products.

Q: Could you update us on the 2 nanometer process in the Foundry business? A: Samsung's 2 nanometer platform is under development, with mass production targeted for 2025. We are in talks with Tier 1 customers and leveraging our GAA process to expand customer engagements in advanced packaging and core technologies.

Q: What are Samsung's strategies for enhancing competitiveness in the on-device AI market following the launch of S25? A: With the S25 series, we enhanced NPU performance and DRAM bandwidth. Galaxy AI now offers a more personalized experience through improved context understanding and multimodal interactions, aiming to act as a personal agent for users.

Q: How is Samsung addressing competition from Chinese suppliers in the conventional DRAM market? A: We focus on high-end markets, scaling down legacy products like DDR4 and LPDDR4, and expanding high-value-added products such as HBM and DDR5. This strategy aims to strengthen our foundation for sustainable growth amid market uncertainties.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.

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