Samsung Electronics warned that its profits could fall again this year, as it announced a 19 per cent fall in net profit for 2015.
The drop was largely driven by a 31 per cent operating profit decline for its IT & Mobile division – dominated by the mobile phone business, which has continued to lose market share to Chinese rivals, while seeing a growing portion of its sales come from lower-cost phones, writes the FT’s Simon Mundy in Seoul.
Further drags came from a sharply higher income tax bill, as well as Won2tn ($1.7bn) in non-operating expenses – notably writedowns on the value of its stakes in sister companies Samsung Card and Samsung Display. These financial burdens pushed Samsung’s net profit growth into negative territory, cancelling out an overall increase in operating profit driven by the components business.