LGD Q3 Operating Profit Up 222% YoY... "Expecting Annual Profit This Year" (Comprehensive)

LG Display Paju Plant Exterior [Photo by LG Display]

[Asia Economy Reporters Heungsun Kim and Hyunjin Jung] LG Display announced on the 27th that it recorded sales of 7.2232 trillion KRW and an operating profit of 528.9 billion KRW in the third quarter of this year. Sales increased by 3.7% compared to the previous quarter and by 7.2% year-on-year, while operating profit decreased by 24.6% compared to the previous quarter but increased by 221.8% year-on-year.

Sales increased from the previous quarter due to expanded shipments of IT panels, but operating profit decreased by 25% compared to the previous quarter due to factors such as the decline in prices of liquid crystal display (LCD) TV panels, rising material costs caused by supply issues within the industry, and increased expenses from the operation of new facilities, the company explained.

By product category, IT panels accounted for the largest share of sales at 45%, TV panels accounted for 32%, and mobile panels accounted for 23%. In particular, large organic light-emitting diode (OLED) panels, which are strengthening their market position, are expected to achieve the annual sales target of 8 million units and turn a profit for the year. LG Display stated that LCD business is shifting its structure to focus on IT to reduce volatility, and is delivering results through high-end products, technological differentiation, and cooperative relationships with global strategic customers.

LG Display expects that in the fourth quarter, shipment area will increase by the mid-teens percentage compared to the third quarter as shipments delayed due to component supply issues recover. Although LCD TV panel prices are expected to continue declining, the shipment of mobile products, which have relatively higher prices per area, is expected to increase, leading to a slight rise in price per area.

Seodonghee, Executive Vice President and Chief Financial Officer (CFO) of LG Display, said, "The LCD business has proactively shifted capacity to competitive IT sectors and strengthened cooperative relationships with strategic customers to minimize the impact of market volatility and establish a stable business structure capable of generating profits." He added, "Based on this, we plan to continuously generate profits in differentiated areas such as IT and commercial sectors."

He continued, "Although the global TV market is currently shrinking, the high-end TV market is growing, resulting in market polarization. Due to increased TV usage, viewing time, and high-quality content, consumers' willingness to pay is rising, and the trend of preferring high-spec products is spreading, so sales of OLED TVs will further expand," he added.

During the third-quarter earnings conference call, positive prospects were shared regarding securing new customers for large OLED panel supply. LG Display stated, "Until now, traditional TV set (finished product) makers have been our main customers, but we are now looking at the market in much more segmented ways, and discussions are underway with some customers. There is a high probability that new customers capable of fully handling large OLEDs and appealing to consumers in that field will be added beyond the traditional TV set customers."

Meanwhile, LG Display defined this year as a meaningful year to achieve annual profitability after three years of losses, stating, "We are positively considering dividends this year from the perspective of shareholder returns, and we will communicate with the market once the specific dividend level is finalized."

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