A flag with the logo of LG Electronics Inc. is shown in this undated file photo taken in Yeouido, Seoul. (Yonhap)
SEOUL, April 27 (Korea Bizwire) — LG Electronics Inc. on Thursday said its operating profit for the January-March period declined 23 percent from a year earlier amid the on-going macroeconomic woes that dampened consumer demand.
The South Korean tech company posted a first-quarter operating profit of 1.49 trillion won (US$1.1 billion), down 22.9 percent from a year earlier but 20.6 percent higher than the average estimate by Yonhap Infomax, the financial data firm of Yonhap News Agency.
Sales decreased 2.6 percent to 20.41 trillion won. Net profit came to 546.5 billion won, down 61 percent from a year earlier.
LG’s quarterly operating profit has actually risen from a year ago, considering the 80 billion-won one-off gains from patent licenses that the tech firm made in the first quarter of last year.
It attributed the company’s third-highest first-quarter profit in history to its “actions to fundamentally improve its business structure and operational efficiency” by in part “expanding B2B segment and non-hardware business areas, such as content and services, which are achieving significant growth.”
Stabilizing material costs and steady sales of high-end home appliances helped the firm achieve the relatively solid earnings results.
LG has said the company’s efforts, such as reducing shipping costs and restructuring its business portfolio, to “preemptively” deal with slowing demand amid economic uncertainties helped it navigate various challenges.
A LG employee explains the LG Signature OLED M at LG’s booth at the Las Vegas Convention Center (LVCC) on Jan. 4, 2023. (Yonhap)
LG’s TV business made a turnaround in the first three months of the year, after making losses for the past three consecutive quarters, thanks to improving TV demand in the European market, LG’s biggest OLED TV market, and decreasing inventory levels and marketing costs.
According to market research firm Display Supply Chain Consultants (DSCC), premium TV shipments are estimated to have fallen 14 percent from a year ago in the first quarter, but they are expected to begin increasing in the second quarter.
LG’s home appliance business logged an operating profit of 1.02 trillion won, its record high for a first quarter, driven largely by the rapid expansion of the B2B segment and strong sales of energy efficient heat pump-enabled products and energy storage systems.
Its vehicle components business, one of LG Electronics’ future growth drivers, gained ground with 2.3 trillion won in sales and 54 billion won in profit.
LG said the value of orders for its electric vehicle component solutions, such as in-vehicle infotainment systems and headlamps, has reached 80 trillion won in accumulation, amid the explosive growth of electric vehicles.
LG Electronics shares shed 0.65 percent to close at 107,700 won on the main Seoul bourse Thursday, underperforming the broader KOSPI’s 0.44 percent gain.
(Yonhap)
