Nice Credit Rating Downgrades LG Display's Long-Term Credit Rating to 'A+'
[Asia Economy Reporter Hwang Yoon-joo] NICE Credit Rating announced on the 11th that it has downgraded LG Display's long-term credit rating from 'AA-' (negative) to 'A+' (negative) reflecting the deterioration in profitability.
NICE Credit Rating explained, "LG Display is expected to show low profitability for the time being due to weakened profit-generating capacity in the liquid crystal display (LCD) TV segment and fixed cost burdens from starting production of small and medium-sized OLED (organic light-emitting diode) panels. This is because unfavorable market conditions continue, such as a significant decline in LCD TV panel prices since last year due to aggressive capacity expansions by domestic panel manufacturers."
It also analyzed, "LG Display's financial stability has deteriorated compared to the past due to large-scale losses and increased borrowings, and the burden of debt relative to profit-generating capacity is expected to remain high as OLED investments expand."
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It added, "Since LG Display is shifting its business structure mainly to OLED, it is necessary to monitor whether OLED panel sales will expand and profitability will be secured in the future."
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