The Hanoitimes - A sharp decline in Samsung Vietnam’s profit was due to unfavorable business operations of Samsung Electronics Vietnam Thai Nguyen (SEVT), Samsung Electronics Vietnam Bac Ninh (SEV) and Samsung Display Vietnam (SDV).
Samsung’s four subsidiaries in Vietnam posted a combined revenue of US$67.1 billion in 2018, up US$5.4 billion against 2017, while their net profit declined by 19% from US$5.8 billion to US$4.7 billion, according to Samsung’s consolidated financial statement.
A sharp decline in Samsung Vietnam’s profit was due to unfavorable business operations of Samsung Electronics Vietnam Thai Nguyen (SEVT) with an US$800-million decrease in profit last year. Meanwhile, Samsung Electronics Vietnam Bac Ninh (SEV) and Samsung Display Vietnam (SDV) both saw their profit down US$200 million each.
In the fourth quarter of 2018, both SEV and Samsung Electronics Ho Chi Minh (SEHC) reported losses of US$70 million and US$80 million, respectively, while SEVT’s profit reached a record low of US$120 million, significantly lower than previous quarters in a range of US$300 million – 1 billion.
The combined profit of four subsidiaries in the fourth quarter reached US$100 million, five times lower than the previous record low of US$500 million in the third quarter of 2016 caused by the Galaxy Note 7 incident.
The inefficient of operation in Samsung’s four subsidiaries in Vietnam led to a lower-than-expected revenue and profit of Samsung globally in the fourth quarter of 2018, down 10% and 31% year-on-year, respectively.
In 2018, Samsung’s combined revenue in the global market reached US$221.6 billion, slightly up from US$217.8 billion in 2017, while after-tax profit increased from US$38.3 billion to US$40.3 billion.
Vietnam’s GDP in 2018 reached US$238 billion, for which Samsung’s operation in Vietnam made up 27.6% of the total, down from the 33% recorded in previous years.
In 10 years, Samsung has increased its investment capital in Vietnam from US$670 million to over US$17.3 billion, a 26-fold increase. More importantly, all the registered capital has been fully disbursed, stated Shim Won Hwan, former CEO of Samsung Vietnam.
According to Samsung's statistics, around 50% of Samsung's smartphones and tablets are produced in Vietnam and exported to 128 countries and territories, including the US, Europe, Russia and Southeast Asia.