SK Hynix delivers record operating profit, shares ease

Shares in SK Hynix have eased after the South Korean chipmaker’s president said strong demand, which helped the company post a record quarterly operating profit, may ease in the second half of the year.

SK Hynix booked an operating profit of Won2.468tn ($2.18bn) a record – in its first quarter to March 31, a 61 per cent increase from the December quarter and a 339 per cent uplift from a year ago.

Net profit of Won1.899tn was up 17 per cent from the fourth quarter.

The steep price increase for DRAM and NAND memory chips since the second half of 2016 pushed revenue higher to a quarterly record high of Won6.29tn. That represented a 17 per cent increase from the fourth quarter, or, a 72 per cent rise from a year earlier.

In a call with analysts, Kim Joon-ho, SK Hynix’s president, said demand for DRAM may ease somewhat in the second half as a supply shortage subsides.

The company also said the strong won led to currency-related losses.

SK Hynix is looking to grow its footprint in NAND memory chips and is among the preferred bidders vying for Toshiba’s prized memory chip division. SK Hynix is already the largest provider of DRAM chips after Samsung Electronics.

Shares in SK Hynix were down 0.6 per cent, compared to a 0.5 per cent gain for Korea’s benchmark Kospi.

Shares have eased 4.7 per cent from a February peak that was the stock’s highest level since early 2002.