LG Innotek Reports Record Annual Operating Profit of KRW 1.2718 Trillion Last Year

Q4 Earnings Plummet... Operating Profit Down 60.4%

[Asia Economy Reporter Park Sun-mi] Despite a 60.4% decrease in operating profit in the fourth quarter of last year due to sluggish IT demand, LG Innotek achieved its highest annual performance for the fourth consecutive year, recording 1.2718 trillion KRW in operating profit.

On the 25th, LG Innotek announced that in the fourth quarter of last year, it recorded sales of 6.5477 trillion KRW and an operating profit of 170 billion KRW. Sales increased by 14.4% compared to the previous year, but operating profit decreased by 60.4%. The fourth quarter of last year was a period when China implemented lockdown measures to prevent the spread of COVID-19. Profitability deteriorated due to several adverse factors including production disruptions in key supply chains, sluggish IT demand for TVs, PCs, and smartphones caused by the global economic slowdown, and a decline in the KRW-USD exchange rate.

Although the fourth quarter performance was weak, the full year of 2022 recorded an all-time high. Sales reached 19.5894 trillion KRW, and operating profit was 1.2718 trillion KRW. This marks the fourth consecutive year of record-breaking performance since 2019. Compared to 2021, sales increased by 31.1% and operating profit by 0.6%. The optical solutions business, which produces camera and 3D sensing modules, led the growth in performance, while the substrate materials business supplying semiconductor substrates and the automotive components business selling parts for electric and autonomous vehicles supported sales expansion.

By business division, in the fourth quarter, the optical solutions business recorded sales of 5.6335 trillion KRW, a 15% increase compared to the same period last year. Sales increased centered on high-value-added products such as multi-camera modules for smartphones and 3D sensing modules as supply for new customer models began in earnest. The substrate materials business recorded sales of 391.5 billion KRW, down 8% from the same period last year. Sales declined due to sluggish IT demand in front-end industries such as TVs, PCs, and smartphones, as well as year-end inventory adjustments by customers. Generally, when demand in front-end industries declines, customers prioritize using existing inventory and do not order new parts. From the supplier’s perspective, orders decrease, leading to reduced component sales.

The automotive components business saw sales increase by 45% to 421.4 billion KRW. Demand related to electric and autonomous vehicles expanded, with sales growth centered on power and steering motors for electric vehicles, continuing six consecutive quarters of sales growth. LG Innotek plans to focus on improving profitability this year through product and customer portfolio optimization, strengthening global supply chain management (SCM) capabilities, and development centered on platform models (versatile products minimizing customization).

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