Moody's: Samsung's weakened 2019 results have no rating impact

SEOUL, Jan. 31 (Yonhap) -- Moody's Investors Service said Friday that Samsung Electronics Co.'s weakened 2019 earnings results won't affect the South Korean chip giant's corporate credit rating.

Moody's currently keeps an Aa3 rating with a stable outlook for the world's largest memory chipmaker.

Samsung Electronics saw its full-year net profit plunge 51 percent to 21.74 trillion won in 2019 from 44.34 trillion won a year earlier. Operating profit also fell 53 percent to 27.77 trillion won from 58.89 trillion won over the cited period, and sales were down 5.5 percent to 230.4 trillion won from 243.8 trillion won.

The sharp declines are "a result of the cyclical downturn in the memory chip market, and to a lesser extent, weakened demand for display panels," the global credit rating firm said in a statement.

"Nevertheless, memory market conditions are improving, which will drive a rebound in the company's performance in 2020," Moody's Vice President and Senior Credit Officer Gloria Tsuen said in the statement.

More importantly, Samsung Electronics continued to generate positive free cash flow and maintained a strong net cash position despite difficulties last year, Tsuen said.

The company's high net cash position and strong cash flow generation will also continue to provide the company with strong financial buffers. At the end of 2019, it held cash resources totaling 112 trillion won against total debt of 18 trillion won, Moody's said.

kyongae.choi@yna.co.kr
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