LG Electronics Reports Surprise Q1 Operating Profit of 1.5 Trillion Won... Home Appliances and Automotive Divisions Achieve Record Highs (Comprehensive)

LG Electronics achieved its highest-ever first-quarter performance despite challenging business conditions. The effect of enhancing its business portfolio by increasing the proportion of business-to-business (B2B) sales and efficiently managing the entire process from raw material procurement to supply chain management, production, logistics, and sales was evident, with both sales and operating profit in the Home Appliance & Air Solution (H&A) and Vehicle Solutions (VS) business divisions marking record highs for the first quarter.

LG Electronics' 'Surprise Performance' in Q1 Despite Economic Recession
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On the 27th, LG Electronics announced that its consolidated first-quarter sales reached KRW 20.4159 trillion, with an operating profit of KRW 1.4974 trillion. Numerically, sales and operating profit decreased by 2.6% and 22.9%, respectively, compared to the same period last year. However, considering that last year's first-quarter operating profit included a one-time patent income of about KRW 800 billion, this year's results effectively indicate an expansion in profitability. Among all first-quarter performances to date, sales rank second, and operating profit ranks third highest.

Since adopting the International Financial Reporting Standards (IFRS) in 2009, LG Electronics surpassed Samsung Electronics' operating profit (KRW 640.2 billion) for the first time. Even when comparing only the TV and home appliance businesses of the two companies, LG Electronics' operating profit of KRW 1.2191 trillion is more than six times Samsung Electronics' KRW 190 billion.

LG Electronics' achievement of record-high management performance despite global economic uncertainties is largely due to the advancement of its business portfolio. By business division, the H&A Business Division, responsible for home appliances, recorded first-quarter sales of KRW 8.0217 trillion and operating profit of KRW 1.0188 trillion. Both sales and operating profit are the highest ever for a first quarter. The operating profit exceeded KRW 1 trillion in a single business division for the first time in history.

In particular, sales of high-efficiency and eco-friendly products such as heat pumps and energy storage systems (ESS) increased in response to strengthening energy regulations mainly in advanced markets like Europe. The two-track strategy of solidifying the competitive edge of existing premium home appliances while strengthening the lineup of best-selling product groups proved effective. LG Electronics plans to accelerate growth in the second quarter, when the air conditioner market enters its peak season, by leading with high-efficiency and eco-friendly products. It also plans to focus on service businesses, which fall under non-hardware areas such as rental and care services. LG Electronics' rental and care service sales have grown at an average annual rate of over 30% in the past five years.

The Home Entertainment (HE) Business Division, which includes TVs, recorded first-quarter sales of KRW 3.3596 trillion and operating profit of KRW 200.3 billion. Sales slightly declined compared to the same period last year due to prolonged geopolitical issues in Europe leading to weakened demand. However, the webOS platform-based content and service business continues to grow, and precise market demand forecasting combined with effective supply chain and cost management enabled a return to profitability.

The VS Business Division recorded first-quarter sales of KRW 2.3865 trillion and operating profit of KRW 54 billion. Both sales and operating profit achieved the highest first-quarter results ever. The order backlog, which reached KRW 80 trillion at the end of last year, sequentially translated into increased sales volume, significantly boosting sales. Profitability improved due to economies of scale from expanded sales and stable supply chain management efforts, maintaining a positive earnings trend compared to the same period last year and the previous quarter.

The Business Solutions (BS) Business Division, focused on B2B business, recorded first-quarter sales of KRW 1.4796 trillion and operating profit of KRW 65.7 billion. Although sales and operating profit slightly decreased due to reduced demand for IT products, the division showed growth compared to the previous quarter thanks to competitive products like the ultra-slim LG Gram launched in time for the graduation and admission seasons. LG Electronics plans to further strengthen the competitiveness of its premium IT lineup, including laptops and gaming monitors.

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