Samsung Vietnam reports massive loss following Galaxy Note 7 scandal

SEV, based in the northern province of Bac Ninh, incurred a loss of $122.6 million in the third quarter, down sharply from a net profit of $490 million a year ago, according to a recent statement from parent company Samsung Electronics.

Samsung’s profits were hit following battery explosions on the Galaxy Note 7, causing the firm to suspend global sales and withdraw the smart phone from the market.

A representative from SEV said the affects of the scandal were inevitable but declined to give further comment.

In October, Samsung Vietnam said it had no plan to lay off employees in 2016 as a result of the parent company’s crisis and predicted the value of its exports would grow further from last year’s $32.7 billion.

From January-September, SEV made a net profit of $1.04 billion, down 18.7 percent on-year.

The South Korean giant also runs Samsung Electronics Vietnam Thai Nguyen in the northern province of Thai Nguyen and a number of other subsidiaries, which reported significant growth in the Southeast Asian nation in the third quarter.

Phone exports are significant to Vietnam’s exports, with the value of 2015 shipments up by 27.8 percent at $30.17 billion, or 19 percent of the country’s total exports, customs data show.

Just weeks after the roll-out of the Galaxy Note 7 “phablet” in September, Samsung was forced to recall 2.5 million units globally following complaints its battery was exploding while charging.

With images of charred phones flooding social media, the unprecedented recall was a humiliation for a firm that prides itself as an icon of innovation and quality, and the timing of the crisis could not have been worse.