Hynix Falls on Flat Q2 Sales.

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Seoul, Korea-based DRAM leaderHynix Semiconductor Inc. today reported revenue for its Q2 ended June 30 of $1.2 billion (1.3 trillion Korean won), which was flat compared to Q1.

Operating profit was $258 million (266 billion won), 17 percent lower than $311.3 million (321 billion won) in Q1 due mainly to a precipitous price decline in the DRAM market that could not be completely offset by increased bit growth and reduced unit cost, the company said.

Contrary to reduced DRAM sales, Hynix pointed out that NAND flash sales have increased, mainly attributable to the flexible use of capacity and more favorable NAND Flash market condition than DRAM during Q2.

Meanwhile, net income fell 26 percent to $229.9 million (237 billion won), from $311.3 million (321 billion won) in Q1.

As a result of its expansion of NAND flash business and competitive cost structure, Hynix recorded operating profit margin of 21 percent.

In parent basis, Q2 revenue was $1.2 billion (1.2 trillion won); operating profit was $207.6 million (214 billion won), which showed sequential declines of 4 percent and 29 percent respectively, while net income was $230.8 million (238 billion won), a decrease of 25 percent sequentially.

At the end of Q2, consolidated cash and short-term financial instruments remained at $547 million (564 billion won), a decrease of approximately $223.1 million (230 billion won) from $770.1 million (794 billion won) in Q1 as the payments for Q1's capex were reflected in Q2.

Meanwhile, Hynix's debt level at the end of Q2 declined by $67.9 million (70 billion won) sequentially to $1.8 billion (1.874 trillion won), improving the company's debt to equity ratio to 37 percent, compared to 41 percent at the end of Q1. Hynix said it continuously aims to reduce its debt with operating cashflow and through disposition of non-core assets.

To this end, Hynix refinanced $1.2 billion (1.2 trillion won) of the $1.5 billion (1.5 trillion won) of debt under the Corporate Restructuring Promotion Act that was previously scheduled to mature in December 2006. Hynix obtained a syndication loan which consists of a U.S. dollar facility in the amount of $500 million and a won facility in the amount of $242.5 million (250 billion won) from domestic and international financial institutions, and financed $500 million of unsecured senior notes from international capital market.

As a result, Hynix said it has emerged from the Corporate Restructuring Promotion Act one and a half years ahead of schedule since being placed under the joint management of the Creditors Council in October 2001.