Samsung reports 53 percent jump in profit despite supply chain woes

Samsung reports 53 percent jump in profit despite supply chain woes
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Updated 27 January 2022

Samsung reports 53 percent jump in profit despite supply chain woes

Samsung reports 53 percent jump in profit despite supply chain woes
  • Operating profits generated from Samsung’s semiconductor business accounted for over 63.7 percent of the Q4 total

South Korean tech giant Samsung Electronics said Thursday its operating profit rose 53.3 percent in the fourth quarter of 2021, as record sales helped overcome pandemic-induced supply chain challenges.


The world’s biggest smartphone maker said its operating profit rose to 13.87 trillion won ($11.55 billion) for the October-December period in 2021, up from nine trillion won in the same quarter the previous year.


Thanks to high memory chip prices and strong consumer demand, Samsung had its highest annual sales of 279.6 trillion won in 2021, an 18 percent jump from a year earlier, the company said in a regulatory filing.


Samsung achieved “record sales thanks to competitive products, despite continuing uncertainty,” the tech giant said in a statement, singling out solid demand for its premium smartphone lines.


While the Covid-19 pandemic has wreaked havoc on the global economy, it has helped many tech companies boom.


Pandemic-driven working from home has boosted demand for devices powered by Samsung’s chips, as well as home appliances such as televisions and washing machines.


But LG Electronics, South Korea’s second-largest appliance firm after Samsung, saw its operating profit shrink by 21.4 percent in the fourth quarter on-year to 677.7 billion won.

The world’s biggest memory chip maker, Samsung Electronics has aggressively stepped up investment in its semiconductor business as the world battles chip shortages that have hit everything from cars and home appliances to smartphones and gaming consoles.


The global chip supply shortage is expected to persist well into the new year, analysts have said.


“In the Memory Business, demand is expected to grow as enterprises ramp up IT investments while the Company will expand supply of high-performance products,” Samsung said.


In November Samsung announced a new microchip factory in Texas, a $17 billion investment. The plant is expected to be operational by the end of 2024.


Samsung is also investing in the development of advanced technologies such as artificial intelligence and robotics, as well as 5G and 6G communications.


Park Sung-soon, an analyst at Cape Investment & Securities, said that memory chip prices were likely to decline in the first half of 2022.


“Samsung’s profit is likely to dip for the January-June period. But we also expect chip prices to turn around in the second half, giving a boost to company profits,” he said.


“We had forecast around a 10 percent fall in chip prices in the first months of 2022 but it appears now that the decline scope will be smaller with solid demands for PCs and improved supply chains.”


Consumer demand for high-end products, such as foldable phones, also helped to further boost profits around the holiday season.


Samsung said it expected the smartphone and premium television market to grow in the third year of the pandemic, though it anticipated sustained “uncertainties triggered by COVID 19 and supply and logistics issues.”


Operating profits generated from Samsung’s semiconductor business accounted for over 63.7 percent of the Q4 total, illustrating the major role the division plays in the sprawling group.


Samsung’s operating profit from the semiconductor division stood at 8.8 trillion won for the October-December period.


Samsung Electronics is the flagship subsidiary of the giant Samsung group, by far the largest of the family-controlled empires known as chaebols that dominate business in South Korea.


The conglomerate’s overall turnover is equivalent to around one-fifth of South Korea’s gross domestic product.


Samsung Electronics’ record sales last year came as Lee Jae-yong, the firm’s vice-chairman and the de facto leader of the wider Samsung conglomerate, returned to management on parole release from prison last August.


Lee had spent over half of a two and a half year sentence for bribery, embezzlement and other offenses in connection with a corruption scandal that brought down ex-South Korean president Park Geun-hye before his release.


His return to management has eased concerns over decision-making at Samsung.


Saudi tourism ministry signs deals to boost localization program

 Saudi Arabia’s Ministry of Tourism signs two agreements. (Twitter/@Saudi_MT)
Saudi Arabia’s Ministry of Tourism signs two agreements. (Twitter/@Saudi_MT)
Updated 11 sec ago

Saudi tourism ministry signs deals to boost localization program

 Saudi Arabia’s Ministry of Tourism signs two agreements. (Twitter/@Saudi_MT)

RIYADH: Saudi Arabia’s Ministry of Tourism has signed two agreements to enhance joint cooperation and support training and localization programs to qualify those wishing to work in the hospitality sector.
The move, which aims to support workers in the food, beverage and accommodation sectors, in support of achieving the Kingdom’s’ tourism human capacity development strategy.
Bandar bin Mohammed Al-Safir, director general of training and localization at the ministry, stressed that these two agreements aim to develop human resources in the tourism sector through quality training programs that will contribute to developing localized skills in the tourism sector.
Under the two agreements, which were signed with Kempinski Al-Othman Hotel and Carlton Al-Moaibed Hotel, the ministry will support dualifying Saudi nationals in the tourism sector within the “Your Future has Arrived” initiative.


Venture capital and microfinance firms should focus on startups, says Al Ahli Holding Group CEO

Venture capital and microfinance firms should focus on startups, says Al Ahli Holding Group CEO
Updated 19 May 2022

Venture capital and microfinance firms should focus on startups, says Al Ahli Holding Group CEO

Venture capital and microfinance firms should focus on startups, says Al Ahli Holding Group CEO

DUBAI: Mohamed Khammas, CEO of Al Ahli Holding Group, said that startup businesses are an excellent opportunity for investment in venture capital funds and microfinance banks.

During an interview with Arab News at the Top CEO event in Dubai, Khammas Mohamed Khammas, CEO of Al Ahli Holding Group, highlighted that startups are a good investment idea because the “ticket size is smaller, and the product ranges are higher.”

Khammas pointed out the risks that arise for startups are not in their early stages but rather when they become successful.

“The challenge is not when they’re trying to have a major impact on the economy; the problems occur when they become successful. All of those are calculated risks,” he said.

Khammas continued to add that regardless of these risks, investing in new, innovative startups is “absolutely the best opportunity.”

Also, during his talk at the event, Khammas  urged banks to fund new and innovative products and ideas in the area after he shed light on how banks are hesitant to invest in creative ideas.


Futurist says ‘virtual economies are already worth $130bn'

Futurist says ‘virtual economies are already worth $130bn'
Updated 19 May 2022

Futurist says ‘virtual economies are already worth $130bn'

Futurist says ‘virtual economies are already worth $130bn'
  • Investing in video games more rewarding than Metaverse: Raford

DUBAI: Even though the business world is increasingly fascinated by the Metaverse, Noah Raford, futurist-in-chief and chief of Global Affairs at Dubai Future Foundation, claimed games, Web3 and virtual economies is where the smart money is.

While speaking at the Top CEO event in Dubai, Raford argued that people should invest in video games, as it is the only successful digital economy so far.
In a statement to Arab News a day after the event, he said: “The metaverse has extraordinary potential and Dubai is moving rapidly to take advantage of it. Virtual assets and digital economies are a huge growth area. There is a lot of hype and wasted investment, but the best examples at the moment are video games and in-game virtual economies – especially connected to NFTs & Web3.”
Fady Kassatly, partner of Enterprise Solutions and Cloud, KPMG, said the Metaverse is nothing but the next evolution, which will make people live differently.

He also added the Metaverse is going to evolve quickly in different directions, and this is just the beginning of the journey.

On his part, Philippe Blanchard, founder of Futurous, stated the Metaverse will change the relationship between humans and nature.

Predicting an inevitable Metaverse future, Valerie Hawley, director of Sorbonne Center for Artificial Intelligence, said every business will look at the Metaverse space and consider using it in the coming years.

She also added the Metaverse is a projection of the world that humans would like to live in.


Egypt’s central bank, citing inflation, hikes interest rates 200 bps

Egypt’s central bank, citing inflation, hikes interest rates 200 bps
Updated 19 May 2022

Egypt’s central bank, citing inflation, hikes interest rates 200 bps

Egypt’s central bank, citing inflation, hikes interest rates 200 bps

CAIRO: The Central Bank of Egypt on Thursday raised its overnight interest rates by 200 basis points, seeking to contain inflation expectations after prices soared by their quickest in three years.

The bank’s Monetary Policy Committee increased the deposit rate to 11.25 percent from 9.25 percent and the lending rate to 12.25 percent from 10.25 percent, it said in a statement accompanying the decision.

It cited an increase in annual urban inflation to 13.1 percent in April from 10.5 percent in March, its highest since May 2019.

Prices were pushed up in part by a currency depreciation and higher wheat prices after the Ukraine crisis, the statement added.

“The MPC decided that raising policy rates is necessary to contain inflationary pressures which is consistent with achieving price stability over the medium term,” it said.

“The elevated annual headline inflation rate will be temporarily tolerated relative to the CBE’s pre-announced target” of between 5 percent and 9 percent before declining after the fourth quarter, it said.

Eighteen analysts polled by Reuters had expected the bank to raise the median deposit rate to 11 percent and its lending rate to 12.25 percent.


Eight injured in S. Korea’s S-Oil Ulsan refinery

Eight injured in S. Korea’s S-Oil Ulsan refinery
Updated 19 May 2022

Eight injured in S. Korea’s S-Oil Ulsan refinery

Eight injured in S. Korea’s S-Oil Ulsan refinery
  • Aramco Overseas Co., a subsidiary of Saudi Aramco, is S-Oil’s major shareholder

RIYADH: At least eight workers were injured in an explosion at an S-Oil refinery in Ulsan on Thursday, reported The Korean Herald.

Aramco Overseas Co., a subsidiary of Saudi Aramco, is S-Oil’s major shareholder. According to the local media, firefighters were notified of an explosion at the S-Oil refinery at 8:52 p.m. The facility is situated some 400 km southeast of Seoul.

The injured workers were shifted to a nearby hospital. The exact cause of the accident has yet to be determined. The Korean Herald quoted fire authorities as saying “the accident occurred inside S-Oil’s refinery at Onsan industrial park while crude oil was being processed into petroleum.”

The injured workers who were transferred to the hospital are being treated for second-degree burns to the face and the palms, according to authorities. S-Oil is the third-largest oil refiner in Korea.

The firefighters at the refinery appeared to be having trouble fighting the blaze, according to local reports.