Business & Economy

Samsung Electronics’ net profit drops 3.1 percent in 1st quarter

Seoul, Apr 29 (efe-epa).- South Korea’s tech giant Samsung Electronics recorded a 3.1 percent drop in its net income year-on-year in the first quarter due to reduced demand of screen displays and consumer electronic products amid the global coronavirus crisis.

The impact was, however, eased due to high sales of chips.

Between January and March the firm recorded an income of 4.88 trillion won ($4 billion), as compared to the 5.04 trillion won marked in the same period of 2019, in turn a 6.7 percent drop from the previous quarter.

Its gross operating profit (EBITDA) dropped 2.1 percent year-on-year to stand at 6.76 trillion won.

Its operating profit stood at 6.45 trillion won and went up 3.4 percent compared to the first quarter of 2019, while its sales turnover grew 5.6 percent – to be placed at 55.33 trillion won – as compared to the data recorded between January and March of 2019.

The figures are in line with the financial forecast released by the company headquartered in Suwon, south of Seoul, in early April, which highlighted the company’s good performance of its semiconductors, its main source of income, during the first quarter.

The world’s biggest manufacturer of semiconductors benefited in this period from an increase in prices and demand which had been building up in the previous months. It further saw a boost due to high sale of chips used in servers which have become more important than ever at a time when many countries resorted to lockdowns due to the coronavirus pandemic.

However, although a solid demand is projected in the second quarter due to remote working, the company believes that there would be an inevitable decline in the revenues of its mobile phone division in the second quarter due to a contraction in the market and the shutdown of shopping centers due to the COVID-19 crisis in the said period.

A steep fall is expected in the demand for its screen displays and its consumer electronics due to the pandemic. EFE-EPA


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