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Samsung Electronics’ cash reserves hit all time high

 Samsung Electronics' cash reserves have reached a record high of 77 trillion won (US$69.10 billion) in the second quarter, according to the tech giant on Sept. 21.

The figure increased 7.8 percent from the fourth quarter of last year and was a whopping 287 percent up from 26.9 trillion won posted in the last quarter of 2011.

Cash reserves include cash, cash-equivalents, short-term financial instruments, and short-term liquid assets.

The amount of cash and cash equivalents increased 14.2 percent to 25.84 trillion won from late last year, and that of the short-term instruments increased 7.3 percent to 47.45 trillion won during the same period.

As Samsung has been accelerating its efforts to streamline its business portfolio to focus on its core businesses, the firm’s cash reserves are further expected to grow down the road.

The tech giant recently sold its shares in four global tech firms, including Sharp of Japan and ASML of the Netherlands, which are estimated to be worth more than 1 trillion won.

It also sold its printing business to HP for approximately 1.1 trillion won earlier this month.

The increased cash reserves are expected to be utilized for paying inheritance taxes of Samsung Group Vice Chairman Lee Jae-yong, a newly appointed Samsung board member, and acquiring emerging tech firms for future growth engines.

Shin Dong-yeob, a business management professor from Yonsei University, was quoted by local newspaper Korea JoongAng Daily as saying, “Samsung will have to achieve innovation through the acquisition of competitive companies as innovation within the existing organization is not viable oftentimes.”

Some of the reserves will likely be used in increasing dividend yields for shareholders.

Late last year, Samsung announced it would refurbish its dividend polices to be more favorable to shareholders.

In line with the firm’s so-called shareholder-friendly policies, it said in October it would buy back and cancel 11.3-trillion-won-worth of its own shares over the course of a year.

Since the announcement, the tech company bought its own shares worth around 11 trillion won, and plans to buy more shares this year, according to Samsung.


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