SEOUL
\nSamsung Electronics posted the biggest quarterly net-profit since 2013 on Thursday after the Note 7 exploding battery controversy.
\nThe results, driven by strong demand for the company\u2019s memory chips, represented its second-largest ever quarterly profit.
\nShares in the firm \u2014 the flagship subsidiary of the sprawling Samsung Group \u2014 have climbed in recent months as rising expectations overcame last year\u2019s recall embarrassment and its vice-chairman going on trial for bribery.
\nBut it formally dropped a reform plan Thursday that would have seen it split in two and could have made the group\u2019s opaque structure more transparent.
\nNet profit for the January-March period jumped 46 percent from a year ago to 7.68 trillion won ($6.7 billion), Samsung Electronics said in a statement.
\nIt was its biggest quarterly net profit since the record third quarter of 2013.
\nOperating profit jumped 48 percent from a year ago to 9.89 trillion won \u2014 also the biggest since the third quarter of 2013.
\nA breakdown of the figures showed the firm\u2019s semiconductor business made its largest-ever operating profit of 6.3 trillion won.
\nSamsung \u2014 the world\u2019s largest maker of both mobile phones and memory chips \u2014 provides its chips to other companies including archrival Apple.
\nIt was humiliated by the Galaxy Note 7 recall last year, which cost it billions of dollars and dealt a blow to its reputation, but has just launched a new flagship device, the Galaxy S8, to positive reviews and strong orders.
\nEven so Samsung warned that smartphone sales may be stagnant in the second quarter due to slowing sales of low-end handsets and \u201cintensifying competition\u201d, with Apple set to unveil a new iPhone later this year.
\nShares in Samsung Electronics \u2014 South Korea\u2019s largest firm by value \u2014 rose as much as 2.8 percent to 2.2 million won in morning trade on the Seoul stock market.
\nBut the company has come under pressure on wider fronts.
\nVice-chairman Lee Jae-Yong, the heir to the Samsung group, has been held in custody and is on trial for bribery, with other key executives, in connection with the sprawling corruption scandal that brought down South Korean president Park Geun-Hye.
\nInvestors have also pressed the firm to overhaul its byzantine ownership structure, which enables the founding Lee family to control the vast Samsung empire with complex web of cross-holdings across dozens of group units.
\nSamsung Electronics has considered a proposal by US hedge fund Elliott suggesting it split into a holdings firm and an operating unit, but said Thursday it had dropped the plan, citing regulatory hurdles and potential business risks.
\n\u201cSamsung concluded the risks and the challenging environment surrounding a change in the corporate structure would not be beneficial for enhancing shareholder value and sustaining long-term business growth,\u201d it said in a statement.
\nIn an apparent bid to assuage investors, it said it would cancel 40 trillion won-worth of shares it is holding for itself, which should boost the value of remaining holdings.
\nLee Jae-Yong is accused of bribing Park and her secret confidante at the heart of the corruption allegations with millions of dollars in a bid to seek government favours.
\nHe has effectively been at the helm of the group since his father suffered a heart attack in 2014.
\nHis indictment in February sent shockwaves through the firm and triggered the announcement of a major reform of its top-down management style.
\nThe scandal shed light on the cosy and corrupt ties between the country\u2019s officials and the powerful family-run business groups, called chaebol, that have endured for decades.
\nIn the first quarter, Samsung Electronics\u2019 component-making business \u201cenjoyed strong sales thanks to favourable memory chip and display panel prices\u201d, the firm.
\nThe company invested a whopping 9.8 trillion won to build and upgrade factories \u2014 including 5 trillion won for chipmaking plants \u2014 during the period, and vowed to invest \u201cfar more than last year\u201d throughout 2017 to maintain growth momentum.
\nBut the firm\u2019s mobile business saw sales and profit slow, with operating profits of 2.07 trillion won, down by 47 percent from a year ago.
\nIt was the smallest profit for the mobile segment in about two years, except in the third quarter of last year at the height of the Galaxy Note 7 problems.<\/p>\n","protected":false},"excerpt":{"rendered":"
SEOUL Samsung Electronics posted the biggest quarterly net-profit since 2013 on Thursday after the Note 7 exploding battery controversy. The results, driven by strong demand for the company\u2019s memory chips, represented its second-largest ever quarterly profit. Shares in the firm \u2014 the flagship subsidiary of the sprawling Samsung Group \u2014 have climbed in recent months […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":{"0":"post-17009","1":"post","2":"type-post","3":"status-publish","4":"format-standard","6":"category-business"},"yoast_head":"\n