LG Electronics Operating Profit Surpasses Samsung Again... "Year-End Automotive Order Backlog Alone Hits 100 Trillion Won" (Comprehensive)

LG Electronics announced its confirmed results for the second quarter of this year, with sales of KRW 19.9984 trillion and operating profit of KRW 741.9 billion (consolidated basis, including LG Innotek), achieving higher profits than Samsung Electronics for two consecutive quarters. The company is improving its business structure by increasing the proportion of business-to-business (B2B) sectors with high profitability, such as automotive components and heating, ventilation, and air conditioning (HVAC). Additionally, the one-time cost of KRW 151 billion related to the GM 'Chevrolet Bolt EV' recall in 2021 was fully accounted for in the second quarter results, raising expectations for the second half performance.

On the 27th, LG Electronics announced that its second-quarter sales increased by 2.7% year-on-year to KRW 19.9984 trillion. This is the highest performance ever recorded for the second quarter. Operating profit was KRW 741.9 billion, down 6.3% compared to the second quarter of last year. This decline was largely due to non-recurring factors related to voluntary retirement programs conducted earlier this year and one-time costs associated with the GM electric vehicle recall.

The most profitable division was H&A (Home Appliances). With second-quarter sales of KRW 7.9855 trillion and operating profit of KRW 600.1 billion, it played a decisive role in achieving LG Electronics' highest second-quarter performance. Notably, operating profit increased by nearly 40% compared to the same period last year. Despite sluggish demand for home appliances and intensified competition, the company’s strategy of emphasizing high-margin premium products and optimizing cost structures such as raw material and logistics expenses proved effective.

The HE (Home Entertainment) division, responsible for the TV business, recorded second-quarter sales of KRW 3.1467 trillion and operating profit of KRW 123.6 billion, driven by growth in platform-based content and service businesses with high profitability. Reflecting the market environment where TV demand is slowing, LG Electronics plans to accelerate its shift from traditional product-centered business to media and entertainment platform business.

The VS (Vehicle Solutions) division, engaged in the automotive components business, posted a loss of KRW 61.2 billion after fully accounting for one-time costs in the second quarter results. However, excluding these one-time expenses, the division achieved record second-quarter results with sales of KRW 2.6645 trillion and operating profit of KRW 89.8 billion. During the conference call following the earnings announcement, LG Electronics stated that it currently holds an order backlog exceeding KRW 80 trillion, expected to approach KRW 100 trillion by the end of the year. The order backlog is composed of 60% automotive infotainment (information + entertainment) and 40% electric vehicle parts and lamp segments.

The company also revealed that the joint venture LG Magna, responsible for the electric vehicle powertrain sector, will soon start operations at its Mexico plant to serve the North American market, in addition to existing plants in Korea and China, and is preparing to establish a new plant for the European market. "The LG Magna Mexico plant, which will begin mass production of new motor products from September, is expected to expand parts supply not only to GM but also to Asian OEMs (original equipment manufacturers), anticipating a turnaround to profitability on an annual basis," the company added.

LG Electronics also shared its mid- to long-term vision for the electric vehicle charging business. "Leveraging LG Electronics’ manufacturing strengths, we have entered the EV charger business and plan to expand into the EV charging solutions business in the mid to long term," the company said, adding, "We are preparing new form factors and service differentiation through business cooperation with partners."

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