Fri, Apr 27, 2018 - Page 10 News List

S Korean telecoms giant Q1 net profit more than doubles

AFP, SEOUL

South Korean telecoms giant Samsung Electronics Co saw net profit leap by more than half in the first quarter, it said yesterday, thanks to strong demand for memory chips and its latest high-end smartphone.

The firm, the world’s biggest maker of memory chips and the flagship subsidiary of the sprawling Samsung group, has recovered from a series of setbacks to post record profits in recent quarters.

However, net profit for the January-to-March period rose 52 percent to 11.69 trillion won (US$10.8 billion), up from 7.68 trillion won a year earlier, the company said in a regulatory filing.

Operating profit was a record 15.64 trillion won, in line with its preliminary guidance of 15.6 trillion won released earlier this month.

“The semiconductor business posted solid earnings — 11.55 trillion won in operating profit on a 20.78 trillion won revenue — on strong demand for memory chips,” the company said in a statement.

The semiconductor business’ earnings performance was driven by demand for memory chipsets for high-value-added servers and graphics products.

The global launch of its new flagship smartphone, the Galaxy S9, as well as strong demand for chips used for smartphones and cryptocurrency mining also contributed to the rise in profitability.

Operating margin in the first quarter was 25.8 percent, up 6.2 percentage points year-on-year, Samsung said.

In the display panel segment, which manufactures OLED and LCD screens, profits were affected by slow demand for flexible OLED panels and greater competition between rigid OLED and LTPS LCD.

A supply glut in the LCD market, brought on by competitors’ increased production, also weighed on earnings, it said.

Total sales grew 19.8 percent to 60.56 trillion won and Samsung expects the memory business to maintain its strong performance in the second quarter.

However, generating overall earnings growth across the company will be a challenge due to weakness in the display panel segment and a decline in profitability in the mobile business in the face of rising competition, it said.

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