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Samsung Electronics has announced the throw came in the first quarter


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Seoul (RPT)

Samsung Electronics, the world's largest chip maker and smartphones, announced Tuesday the plunge in net profit in the first quarter due to a drop in demand for flagship products in the context of increased competition.

In the period from January to March, the South Korean giant's net profit amounted to 5.040 billion won (US 3,9 billion), its worst result since the third quarter of 2016, up 56.9% year on year,

Operating profit also fell by 60.2%, while revenue fell 13.5% to 52,400 billion won (40.4 billion euros).

Samsung Electronics with & # 39 is the flagship of Samsung Group, today with the & # 39; is the largest South Korean giant conglomerates and there & # 39; and whose health with & # 39 is vital for the world economy 11.

The Group was able to resist the headwind in recent years, but suffered another sura & # 39; serious blow after the humiliating postponement of the launch of the flagship smartphone and the conclusions of its leader de facto.

Samsung had to be postponed until late April release of its Galaxy smartphone fold complex, very sophisticated device, he spent almost eight years to develop, due to a problem on the screen fragility.

At the same time, the profitability of the group is under stress due to the increase in the world supply of electronic components, when demand decreases.

– Dismiss the action –

Samsung Electronics is also facing increasing competition in the smartphone market, its Chinese competitors offer equivalent products at lower prices as Huawei, which surpassed the US Apple in 2017 and is currently ranked second in the world.

"Mobile devices have suffered from declining demand and increasing competition," said Samsung Electronics, which was launched in early April, a profit warning for the benefit of its investors. "Big screens also accused the impact of falling prices for LCD panels, in the context of seasonal bad results," he added in a statement.

The name fell to 0.87% in morning trade in Seoul Stock Exchange.

Samsung was launched in early April, the first smartphone in the world operating with 5G, when South Korea became the first country to offer the fifth generation mobile network standards throughout the country.

But he was forced to postpone the release of its Galaxy Fold to $ 2,000, when the first testers found it difficult breakage of the screen after a few days of use.

This device was not the first clamshell phone, but it should stimulate demand and revitalize the market in search of innovation.

"Increased competition in the markets reached maturation TVs and smartphones have to be difficult in the second half," the group.

– Explosive battery –

South Korea SK Hynix, the second largest producer of memory chips and also blamed the plunge in operating profit in the first quarter.

Greg Roh, an analyst at HMC Securities & Investment, predicted that the downward trend will continue in the second quarter. "Things could change in the third quarter due to higher demand for memory chips," he said he told AFP.

With the decline in profits in the mobile division, Samsung Electronics earlier pulled out of the game, thanks to brisk sales of its memory chips, which are equipped with their own phones, but also its competitors, whose big competitor of Apple.

South Korea has also previously held 20% of the Chinese smartphone market, the biggest market in the world for these devices, but sales there have dropped to less than 1%.

the group's reputation was suras & # 39; ozna spoiled in 2016 in the case of Galaxy Note 7 explosive battery, whose recall had cost billions of euros.

In addition, the heir to the Samsung Group, Lee Jae Yong found himself stuck in a huge corruption scandal that has cost his post in South Korea's former president Park Geun-hye. He is almost a year behind bars until the restoration of freedom in February 2018.

According to rating agency Fitch, Samsung surgery should begin to normalize until the end of the year with the recovery of the semiconductor segment.

"The implications for Samsung deceleration (flea market) must be less than for their peers, thanks to investments in the production of DRAMs, which provide business and economic advantages that enable it to maintain profitability during periods? With lower profits, "she also said.

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