"Surprise Earnings" LG Electronics... "Focusing on Securing Profitability in Home Appliances and Automotive Parts"

LG Electronics Q1 Operating Profit 1.4974 Trillion Won
Strong Performance Across Home Appliances, TV, and Automotive Parts
"Will Continue Growth by Improving Profitability"

LG Electronics, which recorded an earnings surprise in the first quarter, is focusing on securing stable profitability in its core businesses. While improving the performance trend of a strong start and weak finish, the company is also striving to expand new businesses such as automotive components, robots, and electric vehicle charging solutions.

LG Electronics announced this plan during a conference call held after its earnings release on the 27th. The company reported consolidated sales of KRW 20.4159 trillion in the first quarter, down 2.6% from the same period last year. Operating profit was KRW 1.4974 trillion, a decrease of 22.9%. Despite the decline in earnings due to the global economic downturn, the results exceeded market expectations and showed a solid performance. Sales were the second highest ever for a first quarter, and operating profit was the third highest.

LG Electronics Detailed Performance Trends / [Image Source=LG Electronics]

In the first quarter, LG Electronics’ H&A Business Division, responsible for home appliances, posted an operating profit of KRW 1.0188 trillion, the highest ever for a first quarter. It was also the first time a single business division exceeded KRW 1 trillion in a quarter. Despite significant market uncertainties such as the Russia-Ukraine war and high inflation in the second half, the company plans to focus on securing profitability to maintain business growth.

Kim Ikwon, Executive Vice President and Head of H&A Management at LG Electronics, said, "We will secure stable profitability through cost structure innovation and efficiency in logistics and marketing." He also outlined plans to "maintain competitive advantage by utilizing entry-level and ODM models and strengthen our position in the premium market where demand remains steady."

LG Electronics is also improving profitability in the automotive components sector (VS Business Division), which recently returned to profitability. The VS Business Division achieved an operating profit of KRW 54 billion in the first quarter, marking the best first-quarter performance ever. The order backlog, which reached KRW 80 trillion at the end of last year, translated into increased sales volume and improved profitability. The company plans to continue enhancing profitability by lowering semiconductor procurement costs and strengthening supply chain management (SCM) to improve cost structure.

[Image source=Yonhap News]

In the TV business (HE Business Division), LG Electronics is expanding revenue by growing the smart TV ecosystem. The company is continuing growth momentum by increasing the use of the WebOS platform in the market. Lee Jeonghee, Executive Vice President and Head of HE Management at LG Electronics, said, "Smart TVs have great value as media platforms," and added, "We will grow businesses such as content and targeted advertising." He also mentioned plans to "expand profitability through portfolio diversification by growing OLED TV and platform businesses."

As future growth drivers, the company pointed to new businesses such as robots and electric vehicle charging solutions. LG Electronics explained that it plans to expand revenue from the logistics market based on the food and beverage market, where robot demand has been established. The company stated, "Other new businesses are continuing exploratory activities for development."

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