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Industry News

Published on October 13th, 2017 | by The GC Team

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Samsung forecasts record profits as Chief Executive resigns

Samsung Electronics has forecast operating profits for the quarter to September 2017 of 14.5 trillion won (£9.65billion), some three times more than the same quarter of 2016. Memory chips were the main driver of profits, with the new Note 8 smartphone providing an additional boost.

However, with smartphones growth expected to slow, the earnings potential from this source is forecast to diminish.

In the day’s second big announcement from the world’s biggest producer of smartphones, co-CEO Kwon Oh-hyun, has resigned, saying that the company was suffering an “unprecedented crisis,” and that he believed “the time has now come for the company start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry.”

Mr Kwon was one of three co-chief executives of Samsung Electronics, which has suffered a series of corruption scandals culminating in the imprisonment of the group’s accepted heir apparent Lee Jae-yong, convicted of bribery and corruption and sentenced to five years in jail. Mr Lee is currently appealing against his sentence.

Despite its record quarter, the group is seen as facing a number of commercial challenges. Mr Kwon’s resignation is seen as an attempted break with the corruption charges of the past, and a move to give fresh, younger leadership the opportunity to face future challenges.

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