LG Electronics' Secret to Breaking COVID Barriers with Record Operating Profit and Sales Growth (Comprehensive)

Record High Annual Sales and Operating Profit
Annual Operating Profit Surpasses 3 Trillion Won for the First Time

[Asia Economy Reporter Kim Hyewon] LG Electronics achieved its highest-ever annual performance last year, with operating profit surpassing 3 trillion won for the first time despite the challenges posed by the COVID-19 pandemic.

The activation of the non-face-to-face (untact) economy due to COVID-19, along with pent-up demand and increased 'stay-at-home' consumption, led to strong sales in its core home appliances (H&A) and TV divisions, driving an 'earnings surprise.'

LG Electronics announced on the 8th that its consolidated financial statements for last year showed provisional annual sales of 63.2638 trillion won and operating profit of 3.1918 trillion won. These figures represent increases of 1.5% and 31.0%, respectively, compared to the previous year.

Both sales and operating profit set new all-time records last year. Sales surpassed the previous high of 62.3062 trillion won in 2019, and operating profit exceeded the previous record of 2.7033 trillion won set in 2018. Notably, this is the first time LG Electronics' annual operating profit has exceeded 3 trillion won.

In the fourth quarter of last year, sales reached 18.7026 trillion won, and operating profit was 647 billion won. Although slightly lower than the third quarter, these figures represent increases of 16.9% and 536.6%, respectively, compared to the fourth quarter of 2019 (sales of 16.0612 trillion won and operating profit of 101.8 billion won).

Last year's fourth-quarter sales and operating profit were the highest ever recorded for any fourth quarter, with sales also marking the highest for any quarter.

By business division, home appliances stood out. Due to pent-up demand from COVID-19 and other factors, premium new appliances such as stylers (clothing dryers), dryers, washing machines, and dishwashers saw strong sales, with the industry estimating that annual operating profit reached around 2.3 trillion won, the highest ever.

Sales in the home appliances division last year also reached the 22 trillion won range, the highest since the company's founding. The operating profit margin for home appliances reportedly reached double digits for the first time, hitting the 10% range.

Despite variables such as exchange rate fluctuations, the industry views LG Electronics' home appliances as likely to have surpassed U.S. competitor Whirlpool to achieve the top global position last year.

The TV division also contributed to improved performance, with fourth-quarter sales recovering to the 4 trillion won range for the first time in eight quarters, driven by increased sales volume.

Last year, LG Electronics unveiled various new products, including the rollable TV 'LG Signature OLED R' and the space interior appliance brand 'LG Objet Collection.'

The mobile communications (MC) division experienced a downturn in the fourth quarter, but the vehicle component solutions (VS) division reduced its losses for two consecutive quarters, including the third and fourth quarters.

Outlook for this year's performance is optimistic from the start. With the COVID-19 situation continuing this year, demand for premium home appliances and TVs driven by increased stay-at-home consumption is expected to support growth. Some forecasts even predict operating profit could reach 4 trillion won this year.

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