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Samsung upbeat despite profit slump

Samsung says that it will continue to plug away at diversifying and reinforcing its business in a bid to return to profitable growth

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Hit by a softening and saturated mobile phone market and a greater number of low-cost units coming from China, profits at Samsung have plunged almost 40% year-on-year.

Net profit for the fourth quarter of 2015 at Samsung fell to KRW3.2tn (£1.9bn), while consolidated revenue was down to KRW53.3tn. Full-year sales for 2015 were KRW200.7tn, and operating profit came in at KRW26.4tn.

Samsung said maintaining its earnings this year would be a challenge, and it will redouble its efforts to secure profitability for each business unit while concentrating on reinforcing mid to long-term business competitiveness.

It plans to diversify into new areas, such as the internet of things (IoT), and to use smart home and health technology to augment its troubled mobile device business.

However, the company said it will not drop its focus on smartphones, even though last year’s lines failed to excite buyers, and is anticipating good sales and profitability with the introduction of new Galaxy flagship devices around Mobile World Congress in February.

In consumer electronics, Samsung said it expected a strong year for premium TVs, with shipments holding up as consumers buy in anticipation of the Rio Olympics.

The South Korean supplier also talked about diversifying its semiconductor business, which has seen weakened demand as a knock-on effect of the moribund PC market and the flattening mobile market.

Samsung said the demand for more advanced smartphones and high-density servers with dynamic random access memory (DRAM) and solid state drives (SSDs) would boost the market for memory chips this year, and it hopes to be able to respond to that.

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