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Samsung quarterly profits fall for first time in two years

Samsung has announced a decline in profits in the fourth quarter, due in part to declining margins in its smartphone division.

It is the first time in two years that quarterly profits have fallen for the South Korean tech giant, as net profit fell 11 per cent from the previous quarter.

Related: Samsung announces record breaking Q3 profits but smartphone sales slow (opens in new tab)

The firm's earnings release (opens in new tab) revealed that between October and December, net profit was 7.3 trillion won (£4 billion).

Samsung explained that the drop from £5.6 billion in the previous quarter was due to a variety of factors, but perhaps most significantly was the 18 per cent operating income fall in its mobile phone division.

Currency fluctuations and a one-off bonus payment of 800 billion won (£442 million) to its employees also accounted for the overall decline.

The world's largest TV and mobile phone manufacturer still managed to significantly increase its year-on-year profits, despite a relatively less successful fourth quarter.

Overall profits jumped 28 per cent in 2013, with a total profit made of 30.5 trillion won (£17 billion).

Samsung overtook Nokia as the world's largest smartphone vendors (opens in new tab) in 2011 and have since increased its share in the smartphone market to 30 per cent. A large proportion of this comes as a result of its hugely successful Galaxy series of mobile devices.

Looking ahead to 2014, the firm expects to see increased demand for TVs as a result of the football World Cup, and for the demand of smartphones and digital appliances to also grow amid economic recovery in developed markets.