Samsung issues shock warning saying its profits likely fell 60 per cent this year

Mail Online | 4/5/2019 | Isabella Nikolic For Mailonline
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Samsung has warned of more than a 60 per cent plunge in their first-quarter profits this year.

The smartphone company, based in Seoul, South Korea, blamed the weakening markets for the dramatic loss in profits.

Profits - January - March - Firm - Statement

Operating profits for January to March would be 'approximately 6.2trillion Korean won' (£4,186,674,000), the firm said in a statement - down 60.4 per cent.

Sales were about 52trillion won (£35,113,109,200), it said, marking a 14 per cent drop.

Firm - Flagship - Subsidiary - Samsung - Group

The firm is the flagship subsidiary of the giant Samsung Group, by far the biggest of the family-controlled conglomerates that dominate business in the world's 11th-largest economy, and it is crucial to South Korea's economic health.

It has enjoyed record profits in recent years despite a series of setbacks, including a humiliating recall and the jailing of its de facto chief.

Picture - Chip - Prices - Supply - Increases

But now the picture has changed, with chip prices falling as global supply increases and demand weakens.

Samsung Electronics warned investors last week to expect weak operating profits, citing 'unfavourable market conditions' for displays and memory chips.

Demand - Memory - Business - Drop - Price

'Amid weak demand for memory business, a drop in price for signature products is expected,' it said.

'The company will seek to improve cost competitiveness through effective resource management,' it added, 'while enhancing product quality in the short term'.

Samsung - Version - Galaxy - S10 - Smartphone

Samsung was also launching the 5G version of its top-end Galaxy S10 smartphone after South Korea won the global race to commercially launch the world's first nationwide 5G networks this week.

But the company has to contend with increasingly tough competition in the smartphone market from Chinese rivals such as Huawei - which in 2017 surpassed Apple to take second place - offering quality devices at lower prices.

Samsung - Supplies - Components - Manufacturers - Apple

Samsung supplies components to other manufacturers such as Apple as well as making its own devices.

But market prices for liquid crystal displays have fallen 10 per cent quarter-on-quarter, said Sanjeev Rana, an...
(Excerpt) Read more at: Mail Online
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