Persistent Weak IT Demand... LG Innotek Q3 Operating Profit Down 59% YoY

Sales of 4.7636 trillion KRW, Operating Profit of 183.4 billion KRW
"Expecting Improved Performance in Q4"

LG Innotek posted a weak performance in the third quarter due to the impact of the economic downturn.

LG Innotek announced on the 25th that its operating profit for the third quarter of this year recorded 183.4 billion KRW, down 58.8% compared to the same period last year. Sales during the same period fell 11.6% to 4.7636 trillion KRW. However, compared to the previous quarter, sales increased by 21.9% and operating profit surged by 899.1%.

LG Innotek Headquarters View. [Photo by LG Innotek]

A company official explained, "In the third quarter, the global economic downturn and weak front-end IT demand due to high inflation continued, and the timing for expanding parts supply for customers' new models was adjusted to the fourth quarter, resulting in a decrease in performance compared to the same period last year. However, the proportion of high-value-added camera modules for smartphones increased, and sales of automotive parts centered on vehicle lighting modules and battery management systems (BMS) for electric and autonomous vehicles also grew."

By business division, the Optical Solutions division recorded sales of 3.9066 trillion KRW, down 12% compared to the same period last year. Sales declined as weak smartphone demand persisted and the full-scale supply timing for customers' new model parts was adjusted to the fourth quarter. Compared to the previous quarter, sales increased by 27%.

The Substrate Materials division posted sales of 328.9 billion KRW, down 24% compared to the same period last year. This was due to continued weak IT demand in front-end industries such as smartphones, TVs, and PCs amid the global economic downturn. Compared to the previous quarter, sales decreased by 2%.

The Automotive Components division recorded sales of 412 billion KRW, up 8% year-on-year and 6% quarter-on-quarter. Sales increased as supply expanded mainly for vehicle lighting modules, BMS, and other parts for electric and autonomous vehicles. In particular, the Automotive Components division is improving profitability through product and customer structure optimization, strengthening global supply chain management (SCM) capabilities, and focusing development on platform models (versatile products that minimize customization).

LG Innotek stated, "In the fourth quarter, performance is expected to improve as parts supply for customers' new models will be concentrated."

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