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Samsung Electronics posted record 3rd quarter profits, replaces CEOs

SEOUL―Samsung Electronics logged a record profit of $10.0 billion for the third quarter and announced a sweeping reshuffle of its top management on Tuesday, seeking to maintain its lead while its heir is in prison. 

The world’s biggest memory chip and smartphone maker has faced multiple challenges since last year, including a humiliating recall of its flagship Galaxy Note 7 handsets and a corruption scandal that engulfed its de facto leader.

Samsung Galaxy Note8 smartphones are displayed at the company’s showroom in Seoul on October 31, 2017. South Korean tech giant Samsung Electronics logged a record profit of 11.2 trillion won—US$10 billion—in the July to September period, it said on October 31, its best for any quarter. AFP

But its net profits for July to September soared 148 percent on the same period a year ago―its best for any quarter―it said in a statement, thanks to strong demand for its memory chips and a recovery in smartphone sales with the roll-out of the new generation Galaxy Note 8.

The figures come only two weeks after chief executive Kwon Oh-Hyun resigned, saying the South’s biggest firm was facing an “unprecedented crisis” and its current profitability was “merely a fruit of decisions and investment made in the past.”

The firm described Tuesday’s numbers as an “overall robust performance.”

Operating profit nearly tripled on-year to 14.5 trillion won―also a quarterly record―it said in a regulatory filing, while sales surged to 62.05 trillion won, another all-time high. 

Samsung Electronics is the key subsidiary of the sprawling Samsung Group, whose heir Lee Jae-Yong was found guilty in August of bribery, perjury and other charges stemming from payments to the secret confidante of ousted president Park Geun-Hye.

Lee, who was jailed for five years, says he is innocent and is appealing.

Samsung Electronics also announced Tuesday the first major reshuffle in its top leadership since 2014, when the wider group’s chairman Lee Kun-Hee suffered a heart attack that left him bedridden. 

Samsung Electronics replaced each of the three CEOs who lead its semiconductor, mobile and TV units with younger executives, while chief financial officer Lee Sang-Hoon―known to be close to the founding Lee family―was named chairman, a role previously held by Kwon.

It is the first time the roles of chairman and CEO will be held by different people–a standard recommendation to improve corporate governance. AFP

Samsung’s profits and share price have rocketed this year, as global chip prices have soared amid booming demand for the high-powered processors used in handsets, computers and cloud storage servers.

It said separately it would double its dividends in 2018, and confirmed a further share buyback for the fourth quarter. AFP

Topics: Samsung Electronics , smartphone , Kwon Oh-Hyun
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