Samsung Electronics reports 3% drop in Q1 net profit

[SEOUL] The world's biggest smartphone maker, Samsung Electronics, reported a three-per cent drop in first-quarter net profits on Wednesday, as the coronavirus pandemic dampened consumer demand.

Net profits in the January to March period were 4.88 trillion won (S$5.67 billion), down 3.1 per cent from a year earlier, the company said in a statement.

The first-quarter performance was "partially due to effects of Covid-19", Samsung said in a statement.

The firm is the flagship subsidiary of the giant Samsung Group, by far the largest of the family-controlled conglomerates known as "chaebols" that dominate business in the world's 12th-largest economy.

The figures come as the coronavirus pandemic wreaks havoc across the world economy - earlier this month Samsung had operations suspended at 11 overseas assembly lines - with expectations rife of a looming global recession.

Samsung said "uncertainties driven by Covid-19 will persist" in the latter half of 2020 as the duration and impact of the pandemic remain "unknown".

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"Sales and profits of set products business, including smartphones and TVs, are expected to decline significantly as Covid-19 affects demand and leads to store and plant closures globally," it said.

Operating profit rose 3.5 per cent year-on-year to 6.5 trillion won, while sales in the first quarter stood at 55.3 trillion won.

AFP