In Q2 2023, Samsung’s profit dropped by 95%
H1 2023 proves to be a terrible time period for the South Korean tech company Samsung. The company observed a decline in memory chip prices that impacted its earnings. Reportedly, the company’s profit declined to a 14-year low in Q1 2023. After this, there was no significant rise in the second quarter of the current fiscal year.
The company shared its earnings report for the quarter. The report indicates that the company was able to earn KRW 60.01 trillion (approx. $48.8 billion) in revenue. In contrast to the previous quarter, it was just a 6% decrease from the recorded KRW 63.75 trillion.
When it comes to the comparisons with the last year it is still not a major decline. Since the company generated KRW 77.2 trillion in Q2 2022, that accounts for a 22% decrease this year. Samsung, though, has had trouble turning a healthy percentage of its revenue into profits. It only made an operational profit of KRW 670 billion ($522 million) in the second quarter of 2023. That is a meager 1.1% profit margin. More significantly, since 2022, Samsung’s Q2 profit has fallen by a startling 95% yearly. The previous time, KRW 14.1 trillion was earned.
As compared to the operating profit generated in the first quarter of this year i.e., KRW 640 billion, the company managed to generate KRW 670 billion this past quarter. Although the figures appear to be good these are not an indication of what Samsung usually generates. For a corporation the size of Samsung, a 95% decrease in quarterly earnings in only a single year is extremely concerning. And, at least in part, the firm is at fault here given the fact that the company is over-relying on its chip division. Besides this, the US market share of Samsung also declined in the second quarter of this year.
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