[Concall] LG Electronics "Rising Logistics Costs Impact 3Q Earnings... 4Q Shipping Rates Expected to Ease"

Kim Ikwon, Executive Vice President of LG Electronics H&A Management, stated during the Q3 earnings conference call on the 24th, in response to the question "To what extent did logistics and marketing costs impact the Q3 earnings," that "From the perspective of the H&A Business Division, regarding the impact of rising logistics costs, due to geopolitical issues this year, the company renegotiated regional maritime freight contracts in the second half of the year, and the increase in freight rates by major shipping companies had some impact on the company's Q3 earnings compared to the previous year."

Kim added, "Fortunately, since July, the Shanghai Containerized Freight Index (SCFI) has been declining, and the company is negotiating freight rate adjustments with high-rate shipping companies. Since these adjustments are made within the existing second-half contracted freight rates, the extent of the impact is expected to be limited, but the effect of increased maritime freight rates in Q4 compared to the previous quarter is also expected to decrease somewhat."

He continued, "Regarding marketing costs, the company expanded marketing expenditures in Q3 compared to both the previous year and the previous quarter. For Q4, the company plans to invest further in strategic marketing activities to strengthen efforts, contributing to year-end and future sales growth."

LG Twin Towers, Yeongdeungpo-gu, Seoul
Photo by Yonhap News

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