Samsung profits surge as company resists restructuring calls

27 Apr 2017

Samsung. Image: Kobby Dagan/Shutterstock

In reporting its highest quarterly profit in three years, Samsung was in a position to resist calls for it to be entirely restructured.

Samsung’s financials have been improving for some time now, even in the wake of one of the bigger corporate PR disasters last year.

After the Galaxy Note 7 was withdrawn from the market amid a haze of smouldering debris, its Q4 figures, released in January, made it seem as if the company was motoring along just fine.

That didn’t stop calls from anxious investors, though, with Paul Elliott Singer’s push for a shift into a holding company preceding the latest figures.

Another area of concern for Samsung was its de facto head, Jay Y Lee, enduring a maelstrom of legal woes in his home country.

However, the South Korean technology giant has posted its largest quarterly profits in several years, after a surge in memory chip sales and pre-orders of the Galaxy 8 smartphone.

From January to March, Samsung’s operating profit was 9.9trn won (€8bn), with revenues up 2pc to 50.5trn won (€40.1bn).

The chip business was the company’s stellar performer, with a record 6.3trn won (€5bn) operating profit.

This area was buoyed by price gains for both DRAM and NAND memory chips, as supply growth constraints and demand for more firepower on devices such as smartphones and servers boosted margins, according to Reuters.

The decent figures meant that Samsung was in a better position to resist Singer’s requests of corporate change.

“Samsung concluded the risks, and the challenging environment surrounding a change in the corporate structure would not be beneficial for enhancing shareholder value and sustaining long-term business growth,” it said in a statement.

To appease shareholders, though, the first ever dividend was paid out. Tens of billions of dollars in treasury shares were also cancelled.

The company’s Galaxy 8, already lauded in some parts, goes on full sale from tomorrow (28 April), which could see its next quarterly results continue this trend.

Samsung. Image: Kobby Dagan/Shutterstock

Gordon Hunt was a journalist with Silicon Republic