The Power of Home Appliances... LG Electronics Achieves Record Q3 Sales... Surpasses 18 Trillion Won for the First Time (Update)

Electric Vehicle Recall Provisions Reflected, Operating Profit Decreases by 49.6%

LG Twin Towers, Yeouido, Seoul. Photo by Mun Ho-nam munonam@

[Asia Economy Reporter Kim Heung-soon] LG Electronics recorded sales exceeding 18 trillion won for the first time ever in the third quarter of this year, driven by strong sales in its core home appliance division. However, operating profit nearly halved compared to the same period last year due to the inclusion of a recall provision for General Motors (GM) electric vehicles in the United States.

LG Electronics announced on the 28th that its consolidated sales for the third quarter of this year reached 18.7867 trillion won, a 22% increase compared to the same period last year. This is the first time LG Electronics' quarterly sales have surpassed 18 trillion won. Operating profit was recorded at 540.7 billion won, down 49.6% from the same period last year due to the provision.

As of the third quarter this year, cumulative sales and operating profit reached 53.713 trillion won and 3.1861 trillion won respectively, both all-time highs. These represent increases of 32.1% and 4.7% compared to the same period last year.

H&A Division Surpasses 7 Trillion Won in Sales for the First Time

The Home Appliance & Air Solution (H&A) division led the performance with sales of 7.0611 trillion won and operating profit of 505.4 billion won. The sales figure is the highest ever for a single quarter and represents a 14.7% increase compared to the same period last year. This is the first time a single LG Electronics business division has exceeded 7 trillion won in quarterly sales.

LG Electronics explained that strengthening localization strategies based on product competitiveness and differentiated customer value was effective. Major markets such as North America, Europe, and Latin America showed double-digit growth compared to the same period last year.

Additionally, sustained high interest in hygiene and health led to strong sales of steam appliances such as dryers, stylers, and dishwashers, while the popularity of LG Objet Collection, a space interior appliance, also contributed to increased sales. Demand for premium appliances grew, boosting sales of new appliances and the LG Objet Collection, while the rental business maintained steady growth.

The Home Entertainment (HE) division, responsible for TV business, recorded sales of 4.1815 trillion won in the third quarter. This represents a 13.9% growth compared to the same period last year, marking four consecutive quarters with sales exceeding 4 trillion won. Operating profit was 208.3 billion won.

LG Electronics stated that premium products such as organic light-emitting diode (OLED) TVs and extra-large TVs continued to show remarkable growth amid increasing global premium demand, and NanoCell TVs also performed well. Shipments of OLED TVs, led by LG Electronics, doubled compared to the same period last year.

The Vehicle Components (VS) division posted sales of 1.7354 trillion won, a 4.8% increase compared to the same period last year. However, due to the inclusion of approximately 480 billion won in GM recall provisions, it recorded an operating loss of 537.6 billion won.

Meanwhile, the Business Solutions (BS) division recorded sales of 1.6899 trillion won, a 13.9% increase compared to the same period last year, but posted an operating loss of 12.3 billion won. LG Electronics explained that "amid semiconductor supply issues, rising prices of key components such as LCD panels and wafers, and increased logistics costs, profitability improvement was limited."

Strategies to Strengthen Business Competitiveness and Profitability

LG Electronics has set plans to strengthen business competitiveness by focusing on 'customer value' while coping with rising raw material prices, increased logistics costs, and global inflation concerns. Core businesses such as home appliances and TVs will expand the sales proportion of premium products and solidify market dominance through supply chain management and efficient resource operation. The vehicle components business, B2B (business-to-business) operations, artificial intelligence (AI), and new businesses will continue proactive investments to reinforce growth momentum.

The H&A division plans to pursue aggressive promotions based on its industry-leading position and differentiated product competitiveness. It also aims to strengthen localization strategies to maintain double-digit sales growth compared to the same period last year and secure stable profitability.

Global TV demand is expected to decline compared to the same period last year as the transition to a "with COVID-19" environment reduces time spent at home. The HE division anticipates increased marketing expenses during the year-end peak season but plans to focus on cost reduction and increase the sales proportion of premium products such as OLED and extra-large TVs to maintain sales growth and secure solid profitability.

The VS division plans to proactively respond to external environmental risks, such as vehicle semiconductor supply issues and logistics disruptions that may cause production delays for automakers, to maximize sales. It will focus on supply chain management and efficient resource operation to improve profitability structure.

The B2B business faces cost burdens from rising prices of key components and increased logistics costs but expects gradual recovery in the information display market and continued demand for IT products. Accordingly, it plans to optimize business operations centered on strategic products to maintain competitive advantage in the global market.

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