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Samsung Electronics Expects 48% Jump in Q1 Profits | ASHARQ AL-AWSAT English Archive 2005 -2017
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The logo of Samsung is seen at a Samsung showroom in Seoul on April 7, 2017. JUNG Yeon-Je / AFP

Embattled Samsung Electronics on Friday forecast profits to jump by half in the first quarter, despite a smartphone recall fiasco and the arrest of its de facto head Lee Jae-Yong who appeared in court at the start of his trial for embezzlement and perjury.

The world’s largest memory chip and smartphone maker said it expected its operating profit in the January-March period at 9.9 trillion won ($8.8 billion), up 48.2 percent from a year earlier, thanks to strong sales of memory chips and display panels.

It would mark the second-highest quarterly operating profit ever posted by the Apple Inc rival.

Its largest-ever quarterly operating profit was 10.1 trillion won, recorded in the third quarter of 2013.

The forecast will come as welcome news to the South Korean giant after a torrid period in which it had to ditch its flagship Galaxy Note 7 after several battery fires.

The debacle cost the company billions of dollars in lost profit and hammered its global reputation and credibility.

The jump in operating profits came despite Samsung sales only increasing by 0.44 percent to 50 trillion won on-year.

Shares in the company were down 0.57 percent, closing at 208,000 won on heavy profit-taking.

Lee has been indicted for bribery, along with four other senior executives, in connection with a graft scandal that saw ex-president Park Geun-Hye impeached and thrown into jail.

Special Prosecutor Park Young-Soo said in his opening statement at the Seoul Central District Court on Friday that Lee’s case is “one of the most deep-rooted and typical cases involving unhealthy relations between politicians and businessmen”.

“In the course of providing bribes, Lee Jae-Yong embezzled company money, illegally diverted domestic assets abroad, hid illegally-earned incomes and committed perjury at parliament,” the prosecutor said.

“The Choi case has left a deep scar in history but it has also provided momentum to re-establish the rule of laws by dint of people’s power,” the prosecutor said.

Park was jailed last week after a court ordered her arrest in connection with the sweeping corruption scandal that brought millions of people onto the streets and saw her impeached.