fbpx
Ethiopia: Loan from United Nations Fund Allows Food and Agriculture Organization (FAO) to Scale Up Fertilizers for Farmers in TigrayRead more How Choosing the Right Printer Helps Small Businesses and Content Creators to Save Time, Maximise Productivity and Achieve GrowthRead more The United States Contributes USD $223 Million to Help World Food Programme (WFP) Save Lives and Stave Off Severe Hunger in South SudanRead more Eritrea: World Breastfeeding WeekRead more Eritrean community festival in Scandinavian countriesRead more IOM: Uptick in Migrants Heading Home as World Rebounds from COVID-19Read more Network International & Infobip to offer WhatsApp for Business Banking Services to Financial Institution Clients across AfricaRead more Ambassador Jacobson Visits Gondar in the Amhara Region to Show Continued U.S. Support for the Humanitarian and Development Needs of EthiopiansRead more Voluntary Repatriation of Refugees from Angola to DR Congo ResumesRead more Senegal and Mauritania Are Rich in Resources, Poor in Infrastructure, Now Is the Time to Change That Read more

Samsung forecasts near-30% jump in Q3 operating profit

show caption
The coronavirus pandemic has wreaked havoc with the world economy but seen many tech companies boom./AFP
Print Friendly and PDF

Oct 08, 2021 - 09:31 AM

SEOUL, SOUTH KOREA — South Korean tech giant Samsung Electronics defied the global supply chain challenges to forecast a near-30-percent jump in third-quarter operating profits on Friday.

The world’s biggest smartphone maker said it expected its operating profits to reach around 15.8 trillion won ($13.3 billion) in a regulatory filing, up 27.9 percent year-on-year.

The company is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea, the world’s 12th largest economy.

The conglomerate’s overall turnover is equivalent to a fifth of the country’s gross domestic product.

Samsung Electronics estimated sales for the July-September period at 73 trillion won, up 9.0 percent year-on-year — a record for any quarter, a spokeswoman told AFP.

The coronavirus has wreaked havoc on the world economy, with lockdowns and travel bans imposed around the globe for many months.

But the pandemic — which has killed around 4.8 million people worldwide — has also seen many tech companies boom.

Coronavirus-driven working from home has boosted demand for devices powered by Samsung’s chips, as well as home appliances such as televisions and washing machines.

Now supply chain problems are hitting economic activity around the world, with companies facing shortages of key commodities, components and shipping capacity.

But weakness in the South Korean won against the US dollar has boosted the chip maker’s profit margins, analysts say, particularly in its smartphone business.

The currency effect has offset troubles caused by “disruptions in smartphone shipments” caused by parts shortages and coronavirus lockdowns in Vietnam and India, where it has production lines, Hana Financial Group said in a report.

But looking forward, prices for DRAM memory chips used in computers — a key Samsung product — are expected to drop in the fourth quarter, dampening prospects for the company.

“With a decline in consumer demand for computers in post-Covid, chip prices are expected to fall starting from the fourth quarter,” said Park Sung-soon, an analyst at Cape Investment & Securities.

Parole release 

Samsung’s latest earnings estimate came after Lee Jae-yong, its vice-chairman and the de-facto leader of the wider Samsung group, walked out of prison in August.

Lee was released on parole after completing just over half of his two and a half year sentence in the latest example of South Korea using economic grounds to free business leaders imprisoned for corruption or tax evasion.

He was jailed for bribery, embezzlement and other offences in connection with the corruption scandal that brought down ex-South Korean president Park Geun-hye.

His return to management has eased concerns over decision-making at Samsung.

But his August release is not the end of his legal travails: he remains on trial on separate accusations of manipulating a takeover to smooth his succession at the top of the Samsung group — the same controversy over which he was said to have sought help from Park.

  • bio
  • twitter
  • facebook
  • latest posts

ZONNTECH.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.