South Korean tech large Samsung Electronics posted a 46.3 % rise in first-quarter web income on Thursday, largely pushed by sturdy gross sales of its smartphones and residential home equipment due to continued stay-at-home demand.
The agency is the flagship subsidiary of the large Samsung group, by far the biggest of the family-controlled empires often called chaebols that dominate enterprise in South Korea, the world’s Twelfth-largest financial system.
The conglomerate is essential to the South’s financial well being – its general turnover is equal to a fifth of the nationwide gross home product.
Samsung Electronics stated web income rose 46.3 % in January to March from a yr earlier to KRW 7.1 trillion (roughly Rs. 47,460 crores).
“Solid sales of smartphones and consumer electronics outweighed lower earnings from semiconductors and displays,” the agency stated in an earnings report.
The figures got here a day after Samsung’s controlling Lee household introduced plans to pay greater than $10 billion (roughly Rs. 74,100 crores) in inheritance taxes following the loss of life final yr of chairman Lee Kun-hee – one of many world’s biggest-ever such settlements – and donate an enormous trove of artwork together with works by Picasso and Monet.
The coronavirus has wreaked havoc with the world financial system, with lockdowns and journey bans imposed across the globe for a lot of months.
But the pandemic – which has killed greater than two million folks worldwide – has additionally seen many tech firms increase, together with Samsung.
Coronavirus-driven working from residence has been boosting demand for gadgets powered by Samsung’s chips, in addition to residence home equipment reminiscent of TV and washing machines.
“Pent-up demand has led the growth in home appliances,” stated James Kang, a senior researcher at Euromonitor International.
“But once the coronavirus situation improves with the distribution of vaccines, the growth of home appliances will be slower than 2020 as people spend more time outdoors,” he added.
Operating revenue rose 45.4 % to KRW 9.4 trillion (roughly Rs. 62,860 crores), whereas gross sales had been up 18.2 % to KRW 65.4 trillion (roughly Rs. 4,37,335 crores)
Analysts say the corporate has loved a selected enhance from rolling out its Galaxy S21 collection in January, greater than a month forward of the flagship product’s standard annual launch schedule.
“Samsung remains the largest vendor shipping 77 million smartphones globally in the first quarter, growing 32 percent year-on-year,” stated Neil Mawston, govt director at Strategy Analytics.
“Samsung’s newly launched more affordable A series 4G and 5G phones, and the earlier launched Galaxy S21 series combined drove solid performance in the quarter.”
But this progress could also be hampered in the second quarter in the face of a worldwide chip scarcity disaster and a decline in market demand due to the pandemic, stated Jene Park, a researcher at Counterpoint Research.
“In the case of Samsung, its main components are being procured in-house, thus its production is expected to be relatively smooth compared to other companies,” Park instructed AFP.
“However, Samsung’s Q2 earnings will be adversely affected by the aftermath of COVID-19 in its major markets, such as India,” he added.
The world chip manufacturing business had been anticipating to see document income this yr, with the stay-at-home financial system persisting, in accordance to Taipei-based market tracker TrendForce.
But energy outages throughout Texas in the US – attributable to a extreme winter storm – shut down semiconductor factories clustered round Austin in February, together with Samsung’s.
“The production line in Austin has been fully normalized in the second quarter,” Samsung stated, with the South’s Yonhap information company reported the corporate could endure round KRW 400 billion (roughly Rs. 2,680 crores) due to the plant’s month-long shutdown.
The agency’s de facto chief Lee Jae-yong, the son of the late chairman, was jailed in January over a sprawling corruption scandal that introduced down former president Park Geun-hye.
He can be present process a separate trial over allegations together with inventory manipulation for a easy succession of energy.
Experts say a management vacuum might hamper the agency’s decision-making on future large-scale investments, which have been key to its rise.
Earlier this week 5 main South Korean enterprise teams appealed to the presidential Blue House for a pardon for him on nationwide financial grounds.
Samsung Electronics shares had been down 0.24 % in early commerce in Seoul.
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