Samsung Electronics on Thursday posted a 30% drop in its operating profit (profits before interest and taxes on business operations) to 5.2 trillion won (approximately $4.6 billion or Rs 30,762 crore), The Guardian reported. The fall in profits was largely attributed to the two recalls of the company's premium Galaxy Note7 mobile because of battery issues. The operating profit of the company's mobile division fell nearly 98% as a result of the recall.
Co-chief executive of Samsung, JK Shin, apologised to shareholders, saying it was "not acceptable" that the company did not meet its own quality checks and assurance standards. "Samsung Electronics will revisit and re-examine every step of our engineering, manufacturing and quality control processes," he said. "We know we must work hard to earn back your trust, and we are committed to doing just that."
The electronics major announced its mobile division will now focus on "expanding sales of new flagship products…as well as regaining consumers' confidence".
Analysts had estimated that Samsung's second recall and subsequent halt in production of the Note7 had cost the company up to $17 billion (approximately Rs 1.13 lakh crore) in lost revenue. Samsung had launched the Galaxy Note7 in South Korea on August 19, but it was forced to declare an international recall of 2.5 million units in September following several reports of the phone exploding.
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