Samsung Electronics introduced Thursday that second-quarter internet earnings elevated 7.Three p.c yr over yr. The robust demand for reminiscence chips has overcome the consequences of the coronavirus pandemic on smartphone gross sales.
The world’s largest producer of smartphones and reminiscence chips mentioned that the income from April to June had been KRW 5.56 trillion (round 34,846 billion rupees).
Working earnings elevated 23.48 p.c to KRW 8.15 trillion (roughly Rupees 51,070 billion), though gross sales decreased 5.6 p.c to KRW 52.97 trillion (roughly Rupees 3.31 billion).
The corporate is the flagship of the large Samsung group, by far the most important of the family-run conglomerates that dominate enterprise on the planet’s twelfth largest economic system, and is important to South Korea’s financial well being.
The numbers assume that the coronavirus pandemic is devastating the worldwide economic system. The south entered a recession for the primary time in 17 years when exports fell as a result of outbreak.
The south is closely depending on commerce and exports fell 13.6 p.c year-on-year within the second quarter – the sharpest decline since 1974.
However locks imposed globally as a result of pandemic – significantly in Europe and the USA – have boosted the corporate’s chip enterprise as knowledge facilities retailer DRAM chips to fulfill the rising demand for on-line actions.
“Though the proliferation of COVID-19 has resulted in closings and slowdowns in shops and manufacturing amenities all over the world, the corporate has responded to challenges with its intensive world provide chain,” the corporate mentioned in a single statement.
It additionally minimized the influence of the pandemic by “strengthening on-line gross sales channels and optimizing prices,” it added.
Samsung’s complete gross sales are one-fifth of South Korea’s gross home product.
Analysts anticipate the corporate’s reminiscence chips and tv enterprise to enhance.
In accordance with analysts, diplomatic and army tensions between India and China might additionally converse for Samsung if Indian customers keep away from Chinese language manufacturers and go for Samsung units as a substitute.
“The expansion is prone to be pushed by reminiscence chips and shows as each merchandise are in excessive demand as a result of excessive content material consumption in the course of the lockout,” Prachir Singh, senior analyst at Market Observer Counterpoint, advised AFP.
“India is exhibiting pent-up demand because the nation recovers within the post-closure interval.
“There’s undoubtedly a temper in opposition to China within the minds of Indian customers. Samsung will definitely profit from it.”
In accordance with Counterpoint, Samsung acquired 20 p.c of the worldwide share of the smartphone market within the first quarter – forward of Chinese language Huawei with 17 p.c and Apple with 14 p.c.
In a broader sense, worldwide gross sales fell by greater than 20 p.c within the first quarter in comparison with the earlier yr. In accordance with Market Tracker Gartner, this was the worst efficiency ever when the pandemic hit shopper spending.
For the second half of the yr, the outlook for cellphones is “nonetheless considerably unsure as locks are easing in some international locations however circumstances are recurring in some locations,” mentioned Gloria Tsuen, senior credit score officer at Moody’s Buyers Service.
Competitors out there is anticipated to “intensify as firms attempt to compensate for poor efficiency within the first half of the yr,” the corporate mentioned.
Along with Samsung Electronics’ challenges, vice chairman and de facto chairman Lee Jae-yong is presently being charged once more with a widespread corruption scandal that might lead him to return to jail.
He’s not detained in the course of the trial, however a responsible verdict might rob the corporate of its senior decision-maker.
Samsung Electronics’ shares rose 1.69 p.c early within the morning.