Samsung Electronics profit spikes on pandemic-driven demand

SEOUL (AFP) – Samsung Electronics, the world’s biggest smartphone and memory chip maker reported fourth-quarter net profits up by more than a quarter year-on-year yesterday, with coronavirus-driven working from home boosting demand for devices powered by its chips.

But the figures were below market expectations according to Bloomberg News, and the company warned of persisting uncertainties over the pandemic, and lower profits in Q1 2021 due to falling prices.

Samsung Electronics is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea, the world’s 12th-largest economy.

The conglomerate is crucial to the South’s economic health – its overall turnover is equivalent to a fifth of the national gross domestic product.

Samsung Electronics said profits rose 26.4 per cent in October to December on a year earlier to KRW6.61 trillion (USD5.97 billion), led by display and memory chip businesses.

“Although challenges from the COVID-19 pandemic continue, company-wide efforts to ensure a stable supply of products and services globally helped Samsung’s fourth-quarter results,” the firm said in an earnings report.

The coronavirus has wreaked havoc with the world economy, with lockdowns and travel bans imposed around the globe for many months.

But the pandemic – which has killed more than two million people worldwide – has also seen many tech companies boom, including Samsung.

“It’s true that Samsung’s sales increased year-on-year due to the spread of the so-called ‘new normal’, which led to a surge in demand for electronics,” said analyst at market observer Counterpoint Research Jene Park.

Operating profit rose 26.4 per cent to KRW9.05 trillion, while sales were also up 2.8 per cent at KRW61.55 trillion.