LG Reports 27.2% Operating Profit Margin in Q1-Q3... Display and Petrochemical Sectors Underperform (Comprehensive)

LG Corporation, led by Chairman Koo Kwang-mo of LG Group, experienced a decline in overall operating profit margin despite an increase in sales revenue from the first to the third quarter this year, due to sluggish performance in the display and petrochemical business sectors.

LG Twin Towers building lit up on the night of the 27th. Photo by Hyunmin Kim kimhyun81@

On the 9th, LG announced that its sales revenue for the third quarter of this year reached 1.8617 trillion KRW, a 7% increase compared to the same period last year. The cumulative sales revenue from the first to the third quarter of this year rose by 3% to 5.4102 trillion KRW.

Operating profit for the third quarter was 509.8 billion KRW, maintaining a similar level to the third quarter of last year (509.2 billion KRW). This figure represents a 12% increase compared to the second quarter of this year. However, cumulative operating profit from the first to the third quarter was 1.4694 trillion KRW, a 20% decrease compared to last year.

The cumulative operating profit margin from the first to the third quarter has been declining, from 43.1% in 2021, 34.9% in 2022, to 27.2% in 2023. Although consolidated sales increased due to growth in LG CNS sales this year, equity-method earnings decreased due to sluggish performance in the display and petrochemical business sectors.

The electronics affiliates, including LG Electronics, LG Display, and LG Innotek, saw their operating profit margin for the first to third quarters this year drop significantly to 0.8%, compared to 2.9% in the same period last year. This was due to decreased profits at LG Innotek and losses at LG Display.

The chemical affiliates, such as LG Chem and LG Household & Health Care, experienced an increase in sales revenue due to expanded sales of LG Energy Solution in the North American market. However, operating profit margin fell from 7.8% in the first to third quarters of last year to 5.7% this year, due to weak demand in the petrochemical business and continued low-price competition from rivals. The telecommunications and service affiliates, including LG Uplus, saw a slight decrease in operating profit margin from 7.5% last year to 7.3% this year for the first to third quarters.

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