SUNDAY, OCTOBER 9, 2016 BUSINESS Despite recall, Samsung tips higher-than-expected profit

SEOUL: Samsung Electronics Co. estimat- Dominant supplier ed its profit rose more than expected in “We’ll see an earnings surprise in the dis- the July-September quarter likely helped play and memory chip businesses,” said Kim by its component businesses that helped Young Woo, an analyst at SK Securities. “The offset the cost from an unprecedented numbers will show that they are the two recall of its flagship smartphones. The growth engines for Samsung.” According to South Korean company said in an earn- Kim’s estimates, nearly half of the income ings preview Friday that its third-quarter was generated by Samsung’s component operating income rose 6 percent to 7.8 business during the last quarter, including trillion won ($7 billion), compared with the chips and the displays. He said the profit 7.4 trillion won a year earlier. from Samsung’s mobile business plunged That was slightly higher than fore- to its lowest level in three quarters. casts. According to financial data Samsung is the world’s largest maker of provider FactSet, analysts expected a fig- the computer memory chips and the ure of 7.5 trillion won. Samsung said world’s dominant supplier of advanced sales fell 5 percent from a year earlier to mobile-phone screens known as OLED. 49 trillion won ($43.9 trillion) during the Samsung uses the lucrative OLED screens three-month period. The company will for its top-end phones, including the Galaxy disclose its full results including earnings S7 and Galaxy S7 Edge phones, whose sales and divisional breakdowns later this were not affected by the Note 7 recall. The month. analysts also believe that the third quarter The results give clues about the short- would be the bottom for Samsung’s earn- term financial impact of its first global ings. OLED screens for mobile devices and recall of smartphones. Last month Samsung’s advanced chips for computers Samsung recalled 2.5 million units of the will likely fuel a huge profit growth for the Galaxy Note 7 just two weeks after its company in coming quarters, they said. debut as consumers reported that bat- That means that Samsung will have a buffer teries were overheating and catching for its bottom line even as its smartphone fire. That was followed by global airlines battery crisis continues to damage its brand banning the phone during flights and reputation. official recalls by the governments in the The latest blow to Samsung’s brand hap- US and Canada. pened earlier this week when a U.S. domes- Analysts estimate the cost of the recall tic plane with 75 passengers had to be could be as much as $1.8 billion as evacuated because of a Samsung phone Samsung shipped the phones back and emitting smoke before the plane’s takeoff. BEIJING: Chinese President Xi Jinping (2nd R) attends a meeting with Portuguese Prime Minister Antonio Costa (L) at the Great replaced them with a new Note 7 phone Southwest Airlines Co. and the Federal Hall of the People. —AFP with safe lithium-ion batteries. But they Aviation Agency are investigating the also said the damage would be out- Wednesday incident but declined to con- weighed by Samsung’s other businesses, firm whether the Samsung phone was the especially its sales of advanced computer replaced Note 7 smartphone that Samsung chips and high-end smartphone displays. had said was safe to use. —AP China to improve access for foreign companies ‘A new round of high-level opening up’

BEIJING: China’s State Council, or cabinet, said showed, with the central bank spending heavily port for its peace process. China is not a big yesterday the country is committed to improve to defend its currency against capital outflows. diplomatic player in the region despite being a access for foreign companies in China, as part of The world’s largest currency hoard fell to under major commodities buyer there, but already has “a new round of high-level opening up”. $3.17 trillion, the People’s Bank of China (PBOC) free trade pacts with Peru, Chile and Costa Rica. According to a statement released yesterday fol- said on its website Friday, below median analyst President Xi Jinping will attend a summit of lowing a State Council meeting chaired by forecasts of $3.18 trillion in a Bloomberg News the Asia Pacific Economic Cooperation (APEC) Premier Li Keqiang, the Chinese government will survey. bloc in Peru next month and is also expected to create an environment for fair competition for It was the third straight month of declines visit several other Latin American nations. foreign firms. “It’s important part of pushing for- and brought China’s reserves to their lowest lev- Chinese Foreign Minister Wang Yi said during a ward a new round of high-level opening up,” the el since April 2011, Bloomberg said. Analysts said visit to that China would maintain statement said. the decline indicated China was selling foreign close communications with Bogota to start sub- In the future, except for certain sensitive exchange to buy its yuan currency amid capital stantive talks on a free trade agreement feasibili- industries in which access for foreign companies flight spurred by slowing growth in the world’s ty study as early as possible, China’s Foreign is restricted, foreign investments would only second largest economy. The data came days Ministry said yesterday. The statement provided require registration, rather than approval. The after the yuan’s official entry into the no details. statement did not offer details on how the new International Monetary Fund’s elite SDR basket Colombian President system would work. It also said the Chinese gov- of currencies, a symbolic coup for Beijing policy- won the 2016 on Friday for his ernment would take further steps to improve makers who are seeking to expand international efforts to end a 52-year-old war with Marxist market entry for foreign companies. use of the currency. guerrillas, a surprise choice and a show of sup- The State Council’s statement comes at a time In the months preceding the currency’s for- port days after voters rejected a peace deal he when the foreign business community in China mal inclusion, China’s central bank spent “heavi- signed with the rebels. Wang said that, as a per- has become highly critical of the current unbal- ly” to keep the yuan’s value stable, roughly $27 manent member of the Security anced access for foreign companies in China. Last billion last month, said Julian Evans-Pritchard of Council and a good friend of Colombia’s, China RIO DE JANEIRO: This file photo taken on August 2, 2016 shows Samsung month, a top European business lobby warned Capital Economics. But “with the inclusion of the would continue to support the peace process. Galaxy S7 mobile devices on display at the Olympic Park. —AFP China that it risked a protectionist backlash unless renminbi in the SDR basket now complete, the “China upholds that all hot button issues in it opened its markets faster to foreign investment. PBOC may no longer feel the need to intervene the end should be resolved via peaceful negotia- Progress on China’s economic reforms has been as heavily to counter capital outflows”, he said, tions. Force cannot resolve problems, only bring Vietnam court rejects fishermen “highly disappointing”, the adding that US Federal Reserve rate hikes could more harm and even hate,” the ministry para- Chamber of Commerce in China said in an annual increase depreciation pressure on the yuan in phrased Wang as saying. Wang also congratulat- lawsuits against Taiwan’s Formosa paper, released as China prepared to host leaders coming months. ed Santos on winning the , the state- from the world’s biggest economies at last ment added. China has a difficult relationship month’s G20 summit in Hangzhou. Colombia deal with the Nobel Peace Prize and reacted with fury HANOI: A Vietnamese court has reject- The court’s judge, Nguyen Van Thang, In other news, China wants to start talks on a when it was awarded to prominent Chinese dis- ed hundreds of lawsuits filed by fisher- was quoted in state-run media saying Forex reserves fall feasibility study for a free trade agreement with sident in 2010. Exiled Tibetan spiritu- men who demanded more compensa- that all 506 cases were returned. The China’s mountain of foreign exchange Colombia as soon as possible, China’s foreign al leader the Dalai Lama, a man accused by tion from a Taiwanese-owned steel fishermen had asked for compensation reserves dropped around $19 billion in minister said during a visit to the South Beijing of being a dangerous separatist, is a fel- plant responsible for a devastating toxic of roughly $2.5 million but did not pro- September to a five-year low, government data American country, where he also offered sup- low peace prize laureate. —Agencies leak, a leading activist said yesterday. In vide clear evidence of their losses, he a rare case of civic action in authoritari- said according to Phap Luat, an official an Vietnam, crowds of fishermen legal news site. Dead fish and other Peru: Deforestation swamped a court house last month to marine life began washing up on file 506 lawsuits against Taiwan’s Vietnam’s central coast in April, hitting slowing as it beefs Formosa, which is building a multi-bil- fishermen and triggering rounds of lion-dollar steel plant in Ha Tinh protests. up laws, sanctions province. After weeks of obfuscation the gov- The conglomerate paid Vietnam’s ernment laid blame on Taiwan’s LIMA: Deforestation in Peru has slowed since peaking at government $500 million after it was Formasa, which has a history of environ- nearly 180,000 hectares (700 square miles) in 2014 when blamed for dumping waste that poi- mental scandals spanning the globe, swaths of the Amazon were illegally cleared for oil palm soned tons of fish and decimated the and ordered the conglomerate to pay a plantations, the head of the country’s forest service said on local seafood industry earlier this year. $500 million fine. The government said Friday. Fabiola Munoz said tougher new laws and enforce- Local fishermen launched their lawsuits it would start distributing the cash to ment, including fines 700 percent higher and jailtime for in an effort to wrest more money from affected fishermen in October and con- people who destroy primary forest, are helping Peru rein in Formosa and demand it shut down the firmed last month that payouts would deforestation. “People really used to think there would be no steel operation altogether. But Catholic range from $130 to $1,600 per person. consequences,” Munoz told foreign media. “That’s changed.” In 2015, Peru lost about 160,000 hectares of forest cover, priest Dang Huu Nam, who helped lead Last Sunday, thousands of Vietnamese and less should be cleared this year, Munoz said. So far in the plaintiffs, told AFP the court had protesters surrounded the steel plant, 2016, about 120,000 hectares have been destroyed, accord- returned more than 100 case files and with some scaling its walls and holding ing to satellite imagery. “We expect the trend to continue to that he was expecting more. “We will signs demanding its closure. Vietnam’s be downward. But that means we have to be more active, look into why the files are returned as communist rulers tolerate little dissent we can’t let our guard down,” Munoz said. Peru controls the court did not say concretely, before but anger over corruption and environ- about a tenth of the Amazon, a tropical forest home to unri- deciding what moves to do next,” Nam mental degradation often spark signifi- valed biodiversity and vast stores of carbon dioxide that fuel said. cant protests. —AFP global warming when destroyed. Environmentalists have criticized Peru for not doing enough to keep wood and gold from being torn illegally 1 in 5 Japan employees face from its forests for export, and for allowing local authorities HONG KONG: This file photo taken on July 6, 1998 shows Hong Kong flag to dole out agricultural concessions that include swaths of death from overworking carrier Cathay Pacific Boeing 747-400 jumbo jet, flying over the Kai Tak virgin rainforest. Munoz said the government has ordered oil palm plantations in Peru owned by United Cacao Airport control tower (bottom) as it approaches Runway 13 on the last day Limited SEZC to halt activities after finding they had illegal- TOKYO: A fifth of the Japanese work- parts in other modern economies. of the 73-year-old airport. —AFP force faces the risk of death from over- According to the paper, 22.7 per- ly cleared primary forest in previous years. But efforts to work, according to a new government cent of companies polled between evict workers from the land have been met with threats, survey into the country’s notoriously December 2015 and January 2016 said Munoz said. Cathay flies Boeing 747 United Cacao, headquartered in the Cayman Islands, did strenuous working culture. Hundreds some of their employees logged more not immediately respond to requests for comment. The of deaths related to overwork-from than 80 hours of overtime each over HK one last time company has previously denied any wrongdoing. The dis- strokes, heart attacks and suicide-are month-the official threshold at which pute is now in Peruvians courts. “We’re still fighting that bat- reported every year in Japan, along the prospect of death from work HONG KONG: Hong Kong flag carrier Cathay mountains. Around 300 airline staff made a tle,” Munoz said. “We hope the courts understand the with a host of serious health problems, becomes serious. The report added importance of these emblematic cases ... of sending the sparking lawsuits and calls to tackle that approximately 21.3 percent of Pacific bid farewell to its Boeing 747 fleet yes- donation of HK$747 ($96) to ride on the ven- terday with a final low-altitude flyby over the erable aircraft, which was first used by right message.” A large Indonesian palm oil company inter- the problem. Japanese employees work 49 or more ested in operating in Peru recently requested a meeting The survey was part of the nation’s hours each week on average, well city’s iconic skyline. The final route harked Cathay Pacific in 1979, for the last time, the back to dramatic images of the planes flying airline said. with Munoz and other public officials to discuss possible first white paper on “karoshi”, or death above the 16.4 percent reported in the low over rooftops of apartment blocks as Photos of the last flyby, at an altitude of 610 investments, Munoz said. from overwork, endorsed by Prime US, 12.5 percent in Britain and 10.4 in they used to approach the old airport on the meters were posted on the airline’s Facebook The officials told the company that the kind of large- Minister Shinzo Abe’s cabinet on Friday. France. The survey concluded that harbor. page, which showed some 747 fans waving scale oil palm plantations that have contributed to rapid While the popular image of Japanese Japanese employees also reported Yesterday’s flight, codenamed CX8747, goodbye. “Goodbye and thank you, our dear- deforestation in Indonesia are not viable in Peru. “We do salary men toiling long hours for the feeling high levels of stress related to flew over the city’s famous Victoria Harbor est Boeing 747,” Adonis Lau said on the airline’s want investments, but we don’t want investments at any company before taking the last train their work, pushing officials to call on and the former Kai Tak Airport, which closed Facebook. “Cathay 747s brought me and my price,” Munoz said. Munoz added that it was unclear how home is changing, many still spend far companies to improve working condi- in 1998 and was considered one of the most family between HK and our stays in US and much a recent spate of forest fires might hurt efforts to slow more hours in the office than counter- tions. —AFP challenging places to land an aircraft due to Canada during my childhood. I’ll miss my time deforestation as the Amazon suffers its driest year in nearly its crowded urban site surrounded by steep on the upper deck,” Denise Ho said. —AFP two decades. —Reuters