South Korean company, Samsung SDI (SDI), a major supplier to Apple and other mobile giants, reported its weakest operating profit since 2014 this week.
The 2017 acquisition of LG Chem Ltd. didn’t have the desired effect on profit and working capital, according to the firm.
It reported an operating profit of KRW20.02 trillion ($17.5 billion), down 26.7% year-on-year.
In April, Samsung said the merger with LG Chem resulted in “material organizational issues” in inventory.
SDI’s secured (and borrowed) funds for 12 months at more favorable conditions will lead to a rapid improvement, the company said.
“Looking forward, the company aims to further expand its market competitiveness by gaining market share and further enhancing its competitiveness in key business areas as well as expanding its products and solutions portfolio,” the company said.
When approached for comment, a Samsung spokesperson said Samsung SDI remains “on track to achieve its full-year targets” and that the investment has succeeded in boosting profitability.
The firm also plans to increase sales by introducing a new sub-brand under the Samsung Electro-Mechanics name and create several new business areas based on the technological synergy between the two companies.
SDI said it aims to increase shipment of dynamic random access memory (DRAM) chips and produce more wafers of several yield-improving technologies.
Looking ahead, SDI said it will “capture opportunities that will rise in the memory market as the overall memory market benefits from a demand-supply imbalance.”
During a recent earnings call, the firm said it aims to strengthen global position in memory products.
The firm also offered a bullish view on solar panel demand, saying that profit margins would be better than in the preceding three months.