LG Sangsa, Operating Profit Down 18% Last Year Due to Completion of Existing Order Projects

[Asia Economy Reporter Su-yeon Woo] LG Sangsa announced on the 30th that its consolidated financial statements showed provisional figures of KRW 10.5309 trillion in sales and KRW 134.8 billion in operating profit for last year. Sales increased by 5.4% compared to the previous year, while operating profit decreased by 18.6%.

Pre-tax profit turned to a loss of KRW 75.3 billion due to non-operating expenses of approximately KRW 210 billion, including impairment losses on tangible and intangible assets, but net loss improved by 58.6% from the previous year to KRW 14.9 billion through asset efficiency. Despite impairment losses on tangible and intangible assets, financial soundness improved as debt ratio and net debt ratio decreased.

LG Sangsa explained that last year's sales increased partly due to increased trading volumes of coal and large LCDs, and expanded shipping volumes in the logistics sector, while operating profit slightly decreased due to sluggish resource market conditions and the completion of progress in existing contracted projects.

An LG Sangsa official said, "Impairment losses on tangible and intangible assets are accounting expenses and do not affect cash flow. After recognizing impairment, future uncertainties can be resolved and the soundness of held assets can be improved," adding, "This year, resource market conditions are expected to recover, and we are hopeful for improved performance through increased palm oil and coal production and trading volumes, as well as growth in the logistics business."

Fourth quarter results last year recorded consolidated sales of KRW 2.6133 trillion and operating profit of KRW 1.7 billion.

LG Sangsa is actively considering expanding palm oil distribution by leveraging its accumulated experience and capabilities in the resource business, and strengthening business linkages into the food resource sector for expansion. It is also steadily exploring new business opportunities such as developing and supplying green minerals, which are key raw materials for secondary batteries, and developing various business platforms and solutions necessary for the advancement of the 4th industrial revolution based on information and communication technology (ICT).

At the end of last year, LG Sangsa announced a new corporate vision called 'Future in Business Solution,' pledging to create the future of business solutions by discovering and providing differentiated customer value. This signifies a commitment to lead growth and change by pioneering new business areas beyond the traditional comprehensive trading company business model.

As a measure to achieve this, LG Sangsa recently reorganized its organization around new business models and transitioned to enable field-centered organizational operations. The existing two business divisions of resources and infrastructure were restructured into three business divisions: energy, industrial materials, and solutions. Additionally, regional headquarters were established in Indonesia and Indochina to enable complete business development and operations at major overseas bases.

An LG Sangsa official said, "We will nurture the palm business as the next revenue source and expand the distribution and trading roles and proportions, which are the core functions of a trading company, to achieve stable growth," adding, "We will also actively consider entering new fields to secure new growth momentum."

This content was produced with the assistance of AI translation services.