Samsung delivers blockbuster increase as chairman exits

Source: Technology Digital

Date :25/04/2008 10:45:31

Samsung Electronics’ first quarter profits surge to biggest increase in two years as Lee Kun-hee steps down.

The results are the last under Lee Kun-hee, who stepped down as chairman this week after being charged with tax evasion and breach of trust.

Handsets

The rise came as strength in Samsung’s handset and display businesses more than offset falling chip prices. Net profit in the first quarter rose 37 percent to 2.19 trillion won (£1.1 billion) as sales increased 19 percent to 17.11 trillion won (£8.7 billion), beating analyst estimates.

Chu Woo-sik, executive vice president of investor relations, said that despite “challenging external conditions” Samsung demonstrated a solid performance due to its competitive advantage in supply chain management and its strategic positioning in emerging markets.

South Korea’s biggest conglomerate said that mobile phone sales had been similar to the previous quarter's record 46.3 million handsets. This was despite a contraction of approximately 13 percent in the global handset market.

Its flat-screen business was boosted by shortages of the units amid strong demand ahead of the Beijing Olympics.

Semiconductor

However, sales at Samsung’s semiconductor business continued to suffer from an industry downturn, with profit tumbling about 64 percent to 190 billion won (about £96.7 million).

This was a result of weak pricing due to supply increases and slow seasonality, Mr. Chu said.

Slow seasonal demand for personal computers hurt sales of dynamic random access memory, or DRAM, chips, he added.

The average price of DRAM chips, which are widely used in computers, is estimated to have fallen by 20 percent from the fourth quarter.

Samsung were shares up 4.4 percent to 690,000 won (£351,000) in late-morning trading.

April 25, 2008