SEOUL: Samsung Electronics’ net profit jumped by almost half in the third quarter, it reported Thursday, as the South Korean giant’s mobile and chip businesses were boosted by US sanctions against Chinese rival Huawei.
The world’s biggest memory chip maker said profits in July-September climbed 48.8 percent year-on-year to 9.36 trillion won ($8.3 billion), beating expectations according to Bloomberg News.
But the company warned that profits in the current quarter are projected to decline, with chip demand weakening and competition intensifying in the smartphone and consumer electronics market.
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 12th largest economy, and it is crucial to South Korea’s economic health.
The figures come a day after the burial of late chairman Lee Kun-hee — who turned the firm into a global powerhouse — and as the coronavirus wreaks havoc with the world economy.
But despite the pandemic hammering many economies, South Korea returned to growth in the third quarter, driven by a better-than-expected exports performance.
The country is now widely expected to be among the least affected in the OECD group of developed economies in 2020 in terms of economic performance.
Analysts say Samsung’s rollout in August of its latest premium smartphones — the Galaxy Note 20 and the Galaxy Z Fold 2 — coupled with strong sales of mid-range phones led the firm’s third-quarter performance. A US ban on foreign companies providing Huawei with US-origin technology, which came into effect on September 15 — cutting off essential supplies of semiconductors and software needed for making smartphones and 5G equipment — also provided a boost.
Operating profit rose 58.7 percent to 12.35 trillion won. Sales rose 8 percent to 66.96 trillion won — a record for any quarter.
But the firm’s immediate prospects may not be quite so rosy.—AFP
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