LG Innotek Q2 Operating Profit 18.4 Billion KRW... 93.7% Decrease YoY

Profitability Deteriorates Due to Weak Frontline IT Demand

LG Innotek announced on the 26th that its operating profit for the second quarter under the Korean International Financial Reporting Standards (K-IFRS) recorded 18.4 billion KRW, down 93.7% compared to the same period last year. Sales increased by 5.5% to 3.9072 trillion KRW. Net profit for the period decreased by 99% to 2.067 billion KRW.

LG Innotek explained, "Profitability declined due to the seasonal off-season, global economic downturn, and weak front-end IT demand caused by high inflation." However, "the proportion of high-value-added camera modules for smartphones increased, and the supply of power components for electric vehicles such as vehicle lighting modules and battery management systems (BMS) also increased, resulting in higher sales compared to the same period last year."

LG Innotek Gumi Plant Panorama / Photo by LG Innotek

By business segment, the Optical Solutions business recorded sales of 3.082 trillion KRW, up 10% from the same period last year. Despite the traditional seasonal off-season and continued weak smartphone demand, sales increased due to a higher proportion of high-value-added products such as triple camera modules. However, sales decreased by 13% compared to the previous quarter.

The Printed Circuit Board Materials business posted sales of 335.5 billion KRW, down 26% from the same period last year. This was due to sluggish IT demand in front-end industries such as smartphones, TVs, and PCs amid the global economic downturn. In particular, semiconductor substrates saw reduced demand due to the smartphone market slump and decreased new product orders as customers adjusted their inventories, leading to a decline in sales.

Sales in the Automotive Components business increased by 18% year-on-year and 2% quarter-on-quarter to 390 billion KRW. Sales of power components for electric vehicles, such as vehicle lighting modules and BMS, increased.

Performance is expected to improve in the second half of the year. LG Innotek forecasted that "the supply of parts for new customer models will be in full swing."

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