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Samsung forecasts profits

April 7, 2017

Samsung has been beset with problems around its S7 Galaxy product and corruption allegations. But the electronics giant expects to announce its second-highest quarterly profit at the end of April.

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Samsung Südkorea
Image: picture alliance/dpa/D.Kalker

Samsung Electronics is headed for its best quarterly profit margin in three years, despite its deputy chairman going on trial over corruption allegations.

Amid a general increase in share price over the last few months, operating profit this year was up 48 per cent from 2016 at 9.9 trillion won ($8.7 billion, 8.2 billion euros), the company forecast. Figures were boosted this year due to increasing demand for memory chips and display screens.

Samsung expects sales to reach 50 trillion won for the first quarter between January and March, while analysts predict that the company's operating profit in the second quarter will reach a record high.

Fire-prone phones

It marks a significant recovery for Samsung after a dismal period, which saw the manufacturers recall their Galaxy Note S7 from the market after regular reports of battery fires. Samsung claimed at an event in Seoul that design and production of the device caused the phone to catch fire.

The company has been at the center of the corruption scandal against impeached ex-president Park Geun-hye in what is described as "the trial of the century" in South Korea.

Samsung's billionaire Vice Chairman Lee Jae-Yong is on trial over allegations of bribery and embezzlement. Yong, the heir to the business, is accused of paying up to $40 million in bribes to Park's secret confidante in order to secure policy favors. 

Last week, the company launched their S8 Galaxy models, which are expected to go on sale on April 21 and look set to challenge the monopoly of Apple's iPhone in the market.

rd/hg (AFP, dpa)