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Mon 29 Jul 2013 11:07 AM

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Samsung Q2 profit up 47.5% to $8.5bn

South Korean electronics giant also announces $1bn increase in investment

Samsung Q2 profit up 47.5% to $8.5bn
Samsungs new Galaxy S4 is seen during its unveiling (AFP/Getty Images)

Samsung Electronics has reported a 47.5 percent rise in Q2 profits, pushing them to $8.53bn.

The company’s mobile division slipped 3.5 percent as the smartphone market slowed, but profits in this area are still up 52 percent from last year.

Samsung also announced a $1bn increase in investment in the hope a strong recovery in semiconductors will make up for weakening smartphone growth.

"It is clear that the global smartphone market is stalling because of the slowing growth of high-end smartphones and rising competition from lower-priced smartphones," said Ahn Young-hoe, a fund manager at KTB Asset Management, which owns Samsung shares.

"There is no major momentum for Samsung. The key is whether Samsung, which sources smartphone parts in-house unlike Apple, will be able to cut parts costs and increase volume and market share to offset reduced smartphone margins."

Samsung warned that smartphone sales could weaken further in the third quarter, but other parts of the South Korean giant’s business continue to perform well, with profits from memory chips rising 71 percent to $1.6bn.

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