Moody's Upgrades LG Electronics Credit Rating from 'Baa3 to Baa2' for the First Time in 7 Years

[Asia Economy Reporter Minji Lee] The international credit rating agency Moody's announced on the 19th that it has upgraded LG Electronics' corporate credit rating from 'Baa3' to 'Baa2'. This is the first time in seven years since February 2014 that Moody's has changed LG Electronics' credit rating. The rating outlook was also maintained as 'stable.'

Moody's explained the reason for the upgrade as follows: "Due to stable performance and the improvement in operating results of its affiliate LG Display, which holds a 37.9% stake, LG Electronics' financial statements are expected to maintain a stable level for the next one to two years following last year."

LG Display is expected to maintain stable total borrowings and increase profits this year and next year after its financial leverage ratio peaked in 2019 due to large-scale facility investments and poor profits. Operating profit is expected to continue increasing over the next 12 to 18 months, supported by increased sales of OLEDs for TV and smartphone manufacturing and steady strengths in the IT sector.

Moody's also analyzed that if LG Electronics withdraws from its loss-making mobile business, further improvements in profits and business characteristics are expected.

Last year, LG Electronics recorded its highest-ever sales and operating profit since its founding, with sales of 63.262 trillion KRW and operating profit of 3.195 trillion KRW. Moody's stated, "LG Electronics maintains excellent liquidity, holding about 5.9 trillion KRW in cash and cash equivalents as of the end of last year, which is sufficient to cover short-term borrowings of 1.2 trillion KRW."

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