LG Electronics Posts Q3 Operating Profit of KRW 781.8 Billion, Cumulative Operating Profit Tops KRW 4 Trillion for First Time
IT DAILY ·
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LG Electronics announced that its consolidated operating profit for the third quarter of this year rose 13.5% from a year earlier to KRW 781.8 billion, while revenue increased 8.9% to KRW 23.827 trillion.
Cumulative revenue through the third quarter of this year reached KRW 71.3807 trillion, and cumulative operating profit came to KRW 4.0346 trillion, up 9.2% and 55.9%, respectively, from a year earlier.
Home appliances and vehicle components served as profit bases, and LG Electronics is continuing to expand investment in AIDC cooling solutions and robotics.
LG Electronics announced on the 7th that its operating profit for the third quarter of this year on a consolidated basis rose 13.5% from a year earlier to KRW 781.8 billion. During the same period, consolidated revenue for the third quarter came to KRW 23.827 trillion, up 8.9% from a year earlier.
LG Electronics said both revenue and operating profit increased in the third quarter, and that profit growth outpaced revenue growth, achieving top-line expansion while also improving profitability.
Its home appliance business and vehicle component business served as stable profit bases, while profitability also improved in the TV business. Based on the earning power of these core businesses, LG Electronics is continuing to expand investment in AI data center cooling solutions and in the robotics business.
Cumulative revenue through the third quarter of this year rose 9.2% from a year earlier to KRW 71.3807 trillion, while cumulative operating profit through the third quarter increased 55.9% to KRW 4.0346 trillion. As a result, the company recorded its first-ever cumulative revenue above KRW 70 trillion and its first-ever cumulative operating profit above KRW 4 trillion for the first three quarters.
A key point in the results is that home appliances account for the B2C profit base, while vehicle components account for the B2B profit base. LG Electronics said both businesses are maintaining solid profitability and are serving as cash cows that steadily generate profit.
The home appliance business achieved revenue growth by expanding subscriptions for appliances, online channels, and B2B, based on a two-track strategy targeting premium products and the volume zone at the same time. It also worked to improve manufacturing and logistics operating efficiency, and those efforts to raise operational efficiency helped sustain its profit structure.
The vehicle component business continued to grow by converting its existing order backlog into revenue. In particular, the share of premium product sales expanded in vehicle infotainment, supporting the vehicle component business's profit base.
As a result, the vehicle component business is placing greater importance on the stage of translating secured orders into actual revenue and profit.
Profitability in the media and entertainment business improved from a year earlier. The increase in premium product sales such as OLED, higher revenue in emerging markets, and growth in the webOS platform business had an impact.
LG Electronics said it continued to post profits by expanding the share of premium sales and improving the efficiency of competitive spending.
Although the company faced burdens from higher logistics, material, and fixed costs in an unfavorable environment, including the war in the Middle East, it said cost pressures were offset by improvements in its cost structure and the effects of revenue growth.
The profits secured from its core businesses are being channeled into investment capacity for AI data center (AIDC) cooling and robotics. As demand for AIDC cooling solutions surges, upgrades are under way at domestic and overseas production bases to respond to demand, and production capacity is also being expanded.
Investment in robotics is also under way. The establishment of the Yangjae Data Factory in Seoul is being pursued, and in Changwon, South Gyeongsang Province, the establishment of mass-production infrastructure for actuators, a core robot component, is being pursued. This is aimed at simultaneously securing data and building a foundation for the production of core components.
Investments help expand the growth base, but they also entail cost burdens in the short term. The revenue scale of the heating, ventilation, and air conditioning business remained at the level of a year earlier despite higher overseas sales, and profitability declined slightly. LG Electronics cited securing new production capacity, investment in future new businesses, and hiring additional personnel as the reasons for the decline in profitability.
The preliminary results announced on the day are based on estimates under Korean International Financial Reporting Standards (K-IFRS). LG Electronics plans to disclose revenue and operating profit by business division, as well as consolidated net profit, at an earnings presentation scheduled for later this month.
Source: IT DAILY · Lee Jae-young
Original: https://www.itdaily.kr/news/articleView.html?idxno=242047
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Source: IT DAILY
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