South Korean electronics giant Samsung Electronics announced on Tuesday that it expects a sharp decline in profits during the second quarter of this year due to the appreciation of the Korean won and a slowdown in the smartphone market.

The company, the world’s largest smartphone manufacturer, expects to post an operating profit of 7.2 trillion won ($7.1 billion) for the second quarter of this year, a decline of approximately 25.1% compared to the same period last year.

The company stated that “its profit forecast is a result of the strength of the South Korean currency during the second quarter, as it appreciated against the dollar, the euro, and most emerging market currencies.”

The company added that there has been a slowdown in the overall growth of the smartphone market, along with intensified competition in the Chinese and European markets.