Following challenges in its semiconductor business and a 40% profit drop in Q3 2024, Samsung announced a $7.17 billion share buyback to enhance shareholder value.
Last week, Samsung Electronics announced plans to repurchase shares worth 10 trillion won ($7.17 billion) over one year, aiming to enhance shareholder value. This decision was revealed in a regulatory filing submitted after the market closed on Friday.
According to the company, within the next three months, the company will buy back and cancel shares totalling three trillion won, including 50.14 million common shares and 6.91 million preferred shares. The remaining seven trillion won in the repurchase programme will be managed by the board of directors, who will decide on the timing and approach for utilising the funds.
This marks the first share buyback by Samsung since 2017 when the company repurchased 20.7 trillion won worth of shares.
The move came after its third-quarter earnings, when Samsung revealed that its semiconductor business faced challenges, including a significant 40% quarter-on-quarter profit decline. To address investor concerns, the company recently outlined its focus on producing high-end chips and secured a major supply deal.
In Q3 2024, Samsung Electronics achieved record-high revenue of KRW 79.1 trillion ($57.35 billion), fuelled by strong sales of high-end memory chips and new smartphones. However, its semiconductor business encountered difficulties, with operating profit in the Device Solutions (DS) Division dropping to KRW 3.86 trillion, due to rising costs and losses in foundry and system chip segments.
Despite these struggles, Samsung’s memory chip sales exceeded expectations, particularly in AI-driven products like HBM and DDR5. Samsung plans to expand its high-end memory offerings and improve its 2nm foundry processes, focusing on AI and HPC markets.
Following the announcement, Samsung’s stock rose 7.2% on Friday, marking its largest daily gain since March 2020, after hitting its lowest point since mid-June 2020.
