Samsung Electronics logged a record profit of $10.0 billion for the third quarter and announced a sweeping reshuffle of its top management yesterday, seeking to maintain its lead while its heir is in prison. The world's biggest memory chip and smartphone maker has faced multiple challenges since last year, including a humiliating recall of its flagship Galaxy Note 7 handsets and a corruption scandal that engulfed its de facto leader. But its net profits for July to September soared 148 percent on the same period a year ago - its best for any quarter - it said in a statement, thanks to strong demand for its memory chips and a recovery in smartphone sales with the rollout of the new generation Galaxy Note 8. The figures come only two weeks after CEO Kwon Oh-Hyun resigned, saying South Korea's biggest firm was facing an "unprecedented crisis" and its current profitability was "merely a fruit of decisions and investment made in the past."
Operating profit nearly tripled on-year to 14.5 trillion won ($13 billion) - also a quarterly record - it said in a regulatory filing, while sales surged to 62.05 trillion won, another all-time high. Samsung Electronics is the key subsidiary of the sprawling Samsung Group, whose heir, Lee Jae-Yong, was found guilty in August of bribery, perjury and other charges stemming from payments to the secret confidante of ousted President Park Geun-Hye. Lee, who was jailed for five years, says he is innocent and is appealing.
Samsung also announced yesterday the first major reshuffle in its top leadership since 2014, when the wider group's chairman Lee Kun-Hee suffered a heart attack that left him bedridden. Samsung Electronics replaced each of the three CEOs who lead its semiconductor, mobile and TV units with younger executives, while CFO Lee Sang-Hoon - known to be close to the founding Lee family-- was named chairman, a role previously held by Kwon. It is the first time the roles of chairman and CEO will be held by different people - a standard recommendation to improve corporate governance.