Samsung says Galaxy Note 7 saga to cost £2 billion

Samsung’s smartphone fire scandal has already cost it almost £2 billion, the Korean smartphone giant revealed as its shares continued to slide.

The world’s biggest smartphone maker has abandoned production of the Galaxy Note 7 and ordered retailers to stop selling the product after hundreds of its flagship devices were reported to have caught fire.

Today, the tech giant confirmed that the move would knock £1.9 billion off its operating profit in the third quarter as it slashed guidance from £5.7 billion (7.8 trillion won) to £3.8 billion (5.2 trillion won).

It is the first time Samsung has put a price on the scandal.

The company also cut revenue guidance. After forecasts sales of 49 trillion won last week, it now expects weaker third-quarter sales of 47 trillion won.

The scandal — which has already caused Samsung’s market value to plummet by £20 billion this week — dragged its shares down again.

The slashed guidance was announced after the Korean market shut.