Samsung Electronics has entered emergency mode to better deal with the deepening economic crisis over the eurozone, according to the Korea Times.
In a report Wednesday, the news daily noted that this was the first time in four years that Samsung has declared a need for "crisis management" since the company started the scheme in late 2008 during the financial crisis. It had then reported an operating loss during the fourth quarter that year of 800 billion won (US$704 million).
At a briefing at the firm's headquarters, Rhee In-yong, a communications officer with Samsung, said that the main reason behind the move was the "highly-fluctuating currency".
"The euro is rapidly losing its currency value. Samsung Electronics is currently being run by scenario-based management as the eurozone is one of its biggest markets,’’ said Rhee, in the article.
Worries over the eurozone have seen its currency weaken over the past year. The euro, against the US dollar, is currently trading at around $1.25, down from $1.45 last July. This means Samsung's overseas earnings are hit when translated back to its home currency, especially with Europe one of its key markets.
However, Samsung noted that the current situation was "looking somewhat better than 2008" because it was seeing an increase of quarterly profit overall, the Korea Times said.
It added that "not all affiliates are operating crisis management systems as their key markets are different. Affiliates are responding to their own interests," according to the executive.
boost in its second quarter, mainly from its handsets business. It is forecast to post around US$6.15 billion in earnings for the three months ended June.