LG Display Predicts "Black Turnaround in Q4"... "Small Panel Sales Proportion Growing 10%P Each Quarter" (Comprehensive)

Q2 Earnings Presentation on the 26th: "Q4 Expected to Return to Profit"
"Q3 Earnings Much Higher Than Q1 and Q2, Q4 Profit Expected"

"I want to clearly understand how the operating loss close to 1 trillion won in a quarter can immediately turn to '0' in the 4th quarter." - Simon Woo (Woo Dongjae), Bank of America Researcher

"The proportion of small (OLED panel) sales is expected to increase by 10 percentage points (P) each quarter from the 20% range in Q2 to Q3 and Q4, and there will also be effects from operating new fabs (factories)." - Kim Heeyeon, Executive Vice President and Chief Strategy Officer (CSO) of LG Display

During LG Display's Q2 conference call on the afternoon of the 26th, securities analysts flooded the company with questions about how LG Display plans to achieve the anticipated "turn to profitability in Q4." LG Display announced a consolidated operating loss of 881.5 billion won in Q2, which is a reduction compared to the Q1 operating loss of 1.0984 trillion won.

LG Display emphasized that the small OLED panel business is growing significantly and that they will definitely deliver results in this segment. LG Display's small OLED panels are scheduled to be installed in vehicles such as the Hyundai GV80, which will be released in the second half of the year.

Kim Heeyeon, Executive Vice President and CSO, stated, "Overall, market inventory is decreasing, so we expect profitability to improve in both large and medium-sized businesses," adding, "The biggest momentum for performance improvement in the second half will be in the small (panel) segment, where production capacity expansion and increased logistics are expected." He continued, "The sales proportion of small panels is expected to increase by 10%P each quarter in Q3 and Q4," and added, "Small panels have strong seasonality, and there will be effects from the operation of new factories."

Panoramic view of LG Display OLED factory in Guangzhou, Guangdong Province, China. [Photo by LG Display]

There was also criticism that "while expecting profitability in Q4, no forecast for Q3 was announced." This is because concerns have arisen about delays in shipments of panels for Apple's iPhone 15 in the U.S., leading to speculation that LG Display did not announce Q3 performance forecasts.

In response, Kim Seonghyun, Executive Vice President and Chief Financial Officer (CFO), said, "We have never taken any position on mobile (panel) shipment delays, but we speak based on a conservative management stance regarding market fluctuations and company operations," adding, "There will definitely be a much larger improvement in performance in Q3 compared to Q1 and Q2, and finally, in Q4, we will turn to profitability."

LG Display also disclosed its automotive panel order performance. Son Gihwan, Executive Director of Auto (vehicle) Marketing, said, "Orders for automotive (panels) reached about 4 trillion won by Q2, and we continue to raise our order targets for next year and the year after," adding, "The current order backlog is about 20 trillion won, and the compound annual growth rate is expected to be in the mid-teens percentage range through 2027."

Regarding the timing of the sale of the Guangzhou LCD (liquid crystal display) TV factory in China and asset securitization strategies, the company remained reserved. Kim Seonghyun, CFO, said, "It is true that the Guangzhou LCD fab is currently operating at about half capacity," adding, "We are giving a lot of thought to asset rationalization, but there are no finalized matters or updates to report at this time."

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