Samsung Electronics today announced net profit of 1.57 billion won (1.06 billion euros) for the first quarter of 2023, down 86.1% year-on-year and the lowest in 14 years.
In a statement sent to the Seoul Stock Exchange today, the South Korean tech giant also said its net profit was down 93.4% compared to the last three months of last year as world demand for chips fell.
Samsung had already announced on April 7 that it would reduce chip production “to a significant level” to reduce excess inventory in the face of a declining semiconductor market, without giving details of levels of manufacturing cutbacks. .
The company, headquartered in Seoul, posted an EBITDA (English abbreviation for earnings before interest, taxes, depreciation and amortization) of 1.83 billion won (1.24 billion euros), a decrease of 63.7% compared to the period between January and March 2022.
Samsung’s operating profit for the first quarter was 640 billion won (432 million euros), down 85.1% year-on-year, but higher than the conglomerate’s forecast three weeks ago.
On April 7, the tech giant admitted that it expected a 95.8% fall in operating profit to 600 billion won (417 million euros) between January and March.
The Device Solutions division, responsible for the production of chips, had an operating loss of 4.58 billion won (3 billion euros) in the first three months of 2023, far from the profit of 8.45 billion won (5.7 billion euros). billion euros) at the beginning of last year.
It was the first time in 14 years that this branch of Samsung recorded losses, the last time was in the first quarter of 2009, in the middle of the global financial crisis.
In a statement, the world’s largest memory chip maker said it expects “demand to gradually recover in the second half of this year as customer inventory levels will have fallen due to adjustments since the second half of last year,” when the world economy started. to delay.
Analysts, however, predict an even tougher period between April and July, with Samsung potentially posting its first global loss since 2008.
“We cannot rule out Samsung going into the red if the effect of new phones wears off,” said Hwang Min-seong, an analyst at Samsung Securities, quoted by South Korea’s Yonhap news agency.
Source: DN
