Samsung forecasts near-30pc jump in Q3 operating profit

SEOUL (AFP) – South Korean tech giant Samsung Electronics defied the global supply chain challenges to forecast a near 30-per-cent jump in third-quarter operating profits yesterday.

The world’s biggest smartphone maker said it expected its operating profits to reach around KRW15.8 trillion (USD13.3 billion) in a egulatory filing, up 27.9 per cent year-on-year.

The company 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’s overall turnover is equivalent to a fifth of the country’s gross domestic product.

Samsung Electronics estimated sales for the July-September period at KRW73 trillion, up nine per cent year-on-year – a record for any quarter, a spokeswoman told AFP.

Pedestrians walk past an advertisement for the Samsung smartphones. PHOTO: AFP

The coronavirus has wreaked havoc on the world economy, with lockdowns and travel bans imposed around the globe for many months. But the pandemic – which has killed around 4.8 million people worldwide – has also seen several tech companies boom.

Coronavirus-driven working from home has boosted demand for devices powered by Samsung’s chips, as well as home appliances such as televisions and washing machines.

Now supply chain problems are hitting economic activity around the world, with companies facing shortages of key commodities, components and shipping capacity.

But weakness in the South Korean won against the US dollar has boosted the chip maker’s profit margins, particularly in its smartphone business, according to analysts.

The currency effect has offset troubles caused by “disruptions in smartphone shipments”, which were triggered by parts shortages and coronavirus lockdowns in Vietnam and India, where Samsung has production lines, Hana Financial Group said in a report.

But forward prospects are looking less rosy, analysts say, with demand for DRAM memory chips – a key Samsung product – expected to fall in the fourth quarter as manufacturers struggle with supplies.