SEOUL: Samsung Electronics on Tuesday reported a 0.1 percent dip in its second quarter net profit from a year earlier, blaming slower global sales of premium smartphones that dented demand for its flagship Galaxy device.
Net profit for the April to June period came in at 11.04 trillion won ($9.9 billion), slightly lower than the 11.05 trillion won in the same period in 2017, the company said in a regulatory filing.
An average of estimates compiled by Bloomberg News had forecast 11.6 trillion won for the period.
Operating profit was 14.87 trillion won, up 5.7 percent and in line with the estimate of 14.8 trillion won suggested in a preliminary guidance report released earlier this month.
But total sales fell 4.1 percent year-on-year to 58.48 trillion won, with the company’s consumer electronics and mobile businesses suffering.
“Second quarter revenue fell due to softer sales of smartphones and display panels,” Samsung said in a statement.
The earnings are sharply down from the 11.69 trillion won net profit registered last quarter, when the company reported a 52 percent jump on year.
The world’s biggest maker of memory chips and the flagship subsidiary of South Korea’s Samsung group, the company has weathered a series of setbacks, including an embarrassing global recall of its Galaxy Note 7 smartphone due to exploding batteries in 2016.
Adding to its troubles, its vice-chairman Lee Jae-yong, scion of Samsung’s founding family, was jailed last year for his part in the sprawling corruption scandal that brought down former president Park Geun-hye.
Lee has since been released after some of his convictions were quashed on appeal, and the company has posted record profits in recent quarters.
The disappointment over the second quarter earnings was reflected in mid-morning trade, with Samsung Electronics shares down 0.7 percent.
Weak sales of its new flagship smartphone, the Galaxy S9, drove down its earnings but robust demand for premium TVs — thanks to soaring interest in the recently concluded 2018 World Cup — and memory chips helped boost the operating profit.
Samsung’s chipmaking unit, which dominates the global market after the firm invested tens of billions of dollars to build and expand factories, provides chips for Samsung devices as well as those manufactured by competitors including Apple.
Although the company’s semiconductor business achieved record high operating profits of 11.6 trillion won, the earnings were lower than expected, with market forecasts averaging 12 trillion won.
“The semiconductor sector fell short of expectations but its outlook for the second half of this year is rather positive as demand for DRAM chips are solid... Therefore, chip prices are expected to remain strong,” a Samsung official said on condition of anonymity.
Analysts said the semiconductor division would continue its upward trajectory and set new records in coming months.
“Operating profit in the semiconductor sector is likely to hit the largest-ever 13.7 trillion won in the next quarter, due to the high DRAM chip prices and increasing shipments of NAND flash memory products,” said Park Yoo-ak, an analyst with Kiwoom Securities.
Samsung said it expected “growing demand for flexible OLED panels to drive earnings higher in the second half” of the year.
But “the mobile market condition will likely remain challenging in the second half amid pricing competition and new product launches,” it said, adding that it would respond by launching its Galaxy Note 9 smartphone earlier than expected.
The company said it would bolster its flagship lineup by marketing the new Note 9 “at a reasonable price” and packing its middle-and-low end products with updated features to fend off competition.
Samsung also said it would pay out dividends of 354 won per share for the second quarter on August 20.
Samsung second-quarter profit dips on slower demand for Galaxy smartphones
Samsung second-quarter profit dips on slower demand for Galaxy smartphones
‘The future is renewables,’ Indian energy minister tells World Economic Forum
- ‘In India, I can very confidently say, affordability (of renewables) is better than fossil fuel energy,’ says Pralhad Venkatesh Joshi during panel discussion
- Renewables are an increasingly important part of the energy mix and the technology is evolving rapidly, another expert says at session titled ‘Unstoppable March of Renewables?’
BEIRUT: “The future is renewables,” India’s minister of new and renewable energy told the World Economic Forum in Davos on Wednesday.
“In India, I can very confidently say, affordability (of renewables) is better than fossil fuel energy,” Pralhad Venkatesh Joshi said during a panel discussion titled “Unstoppable March of Renewables?”
The cost of solar power has has fallen steeply in recent years compared with fossil fuels, Joshi said, adding: “The unstoppable march of renewables is perfectly right, and the future is renewables.”
Indian authorities have launched a major initiative to install rooftop solar panels on 10 million homes, he said. As a result, people are not only saving money on their electricity bills, “they are also selling (electricity) and earning money.”
He said that this represents a “success story” in India in terms of affordability and “that is what we planned.”
He acknowledged that more work needs to be done to improve reliability and consistency of supplies, and plans were being made to address this, including improved storage.
The other panelists in the discussion, which was moderated by Godfrey Mutizwa, the chief editor of CNBC Africa, included Marco Arcelli, CEO of ACWA Power; Catherine MacGregor, CEO of electricity company ENGIE Group; and Pan Jian, co-chair of lithium-ion battery manufacturer Contemporary Amperex Technology.
Asked by the moderator whether she believes “renewables are unstoppable,” MacGregor said: “Yes. I think some of the numbers that we are now facing are just proof points in terms of their magnitude.
“In 2024, I think it was 600 gigawatts that were installed across the globe … in Europe, close to 50 percent of the energy was produced from renewables in 2024. That has tripled since 2004.”
Renewables are an increasingly important and prominent part of the energy mix, she added, and the technology is evolving rapidly.
“It’s not small projects; it’s the magnitude of projects that strikes me the most, the scale-up that we are able to deliver,” MacGregor said.
“We are just starting construction in the UAE, for example. In terms of solar size it’s 1.5 gigawatts, just pure solar technology. So when I see in the Middle East a round-the-clock project with just solar and battery, it’s coming within reach.
“The technology advance, the cost, the competitiveness, the size, the R&D, the technology behind it and the pace is very impressive, which makes me, indeed, really say (renewables) is real. It plays a key role in, obviously, the energy demand that we see growing in most of the countries.
“You know, we talk a lot about energy transition, but for a lot of regions now it is more about energy additions. And renewables are indeed the fastest to come to market, and also in terms of scale are really impressive.”
Mutizwa asked Pan: “Are we there yet, in terms of beginning to declare mission accomplished? Are renewables here to stay?”
“I think we are on the road but (its is) very promising,” Pan replied. There is “great potential for future growth,” he added, and “the technology is ready, despite the fact that there are still a lot of challenges to overcome … it is all engineering questions. And from our perspective, we have been putting in a lot of resources and we are confident all these engineering challenges will be tackled along the way.”
Responding to the same question, Arcelli said: “Yes, I think we are beyond there on power, but on other sectors we are way behind … I would argue today that the technology you install by default is renewables.
“Is it a universal truth nowadays that renewables are the cheapest?” asked Mutizwa.
“It’s the cheapest everywhere,” Arcelli said.
