South Korea's LG Elec reports best quarterly profit in almost eight years

Elizabeth Williams
April 28, 2017

South Korea's LG Electronics Inc said on Thursday its first-quarter operating profit rose 82 percent from a year earlier to its highest in almost eight years on the back of healthy sales for its appliances and television businesses.

"The company believes a holding company does not have clear benefits compared to the advantages of the company's current business structure", Samsung said in its statement, which came alongside its quarterly earnings report, the second-highest quarter of operating profit in its history. The consumer division delivered 380 billion won in operating profit on sales of 10.34 trillion won.

While the first quarter was a torrid time for Samsung as chief Jay Y. Lee was swept up in a political corruption scandal, the world's top maker of memory chips, smartphones and televisions still managed to book a profit that supports expectations for record earnings in 2017.

The Apple Inc competitor's mobile division reported an operating profit of 2.07 trillion won, from 3.89 trillion won a year earlier.

Shares in Samsung Electronics - South Korea's largest firm by value - rose as much as 2.8 percent to 2.2 million won in morning trade on the Seoul stock market. The result is a truly immersive viewing experience without distractions and makes multi-tasking more convenient."Lee added: "Samsung places a high premium on security in order to protect content in the devices".

Samsung said that restructuring the company would hurt its competitiveness. Investors and South Korean lawmakers have criticized the company's structure for allowing the controlling family to exert outsized influence over South Korea's largest conglomerate, despite a relatively modest shareholding.

That announcement is a setback for USA activist hedge fund Elliott Management, which had argued that changing into a holding company would boost Samsung's share price. Also, this quarter comes with the exciting news of another flagship launch - expected in the second half of this year. It also announced a share buyback worth 2.3 trillion won.

The scandal shed light on the cosy and corrupt ties between the country's officials and the powerful family-run business groups, called chaebol, that have endured for decades. Sales increased 1.54 percent on year to 50.55 trillion won, but decreased 5.22 percent on quarter as it had focused on selling more of lucrative high-end products.

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