LG Innotek's Operating Profit Last Year 706 Billion KRW...15% Decrease Compared to Previous Year

Sales Hit Another All-Time High at 21.2008 Trillion KRW
Fourth Quarter Sales Reach 6.6268 Trillion KRW, Operating Profit at 247.9 Billion KRW
"Continued Efforts for Business Structure Advancement and Profitability Improvement"

LG Innotek announced on the 22nd that its consolidated operating profit for last year was tentatively estimated at 706 billion KRW, a 15% decrease from the previous year.

Sales increased by 2.9% year-on-year to 21.2008 trillion KRW. Following the historic breakthrough of 20 trillion KRW in sales in 2023, the company once again set a record high in sales. Net profit fell by 20.5% to 449.3 billion KRW. Operating profit for the fourth quarter was 247.9 billion KRW, down 48.8% from the same period last year. Sales and net profit for this quarter were 6.6268 trillion KRW and 106.9 billion KRW, respectively.

LG Innotek

By business segment, the Optical Solutions business recorded sales of 5.7687 trillion KRW, down 15% year-on-year but up 19% quarter-on-quarter. Annual sales last year were 17.8001 trillion KRW, a 3% increase from the previous year. The Substrate Materials business posted sales of 383.3 billion KRW, up 17% year-on-year and 4% quarter-on-quarter. Although demand recovery for display product lines such as COF (Chip On Film) has been delayed due to sluggish demand in end markets like TVs, sales of semiconductor substrates such as RF-SiP (Radio Frequency-System in Package) increased with the expansion of mobile new model supply. Annual sales last year were 1.46 trillion KRW, a 10% increase from the previous year. The Automotive Components business recorded sales of 474.8 billion KRW, down 0.2% year-on-year and 1% quarter-on-quarter. Sales slightly declined due to stagnation in demand from front-end industries such as electric vehicles. Annual sales were 1.9406 trillion KRW, a 2% decrease from the previous year.

On the other hand, new orders and order backlog (excluding vehicle camera modules) for automotive components have increased for four consecutive years since 2021. As of last year, the order backlog reached 13.6 trillion KRW, surpassing 13 trillion KRW for the first time, a 27% increase from the previous year. New orders recorded 3.9 trillion KRW, a 20% increase year-on-year.

An LG Innotek official explained the recent performance by saying, "Despite the challenging business environment, annual sales reached an all-time high due to the expanded supply of high value-added products such as high-performance camera modules." However, they added, "Operating profit decreased compared to the previous year due to sluggish demand in front-end industries such as electric vehicles and displays, as well as intensified market competition in the optical business."

Park Ji-hwan, LG Innotek’s Chief Financial Officer (CFO), stated, "We will continue to advance our business structure by driving core components for autonomous driving such as vehicle sensing, communication, and lighting, while fostering new AI and semiconductor component businesses led by flip chip ball grid array (FC-BGA) products recently started mass production for global big tech customers."

He added, "We will accelerate activities to enhance cost competitiveness through global production site restructuring and the use of AI and DX, while further improving profitability by expanding proactive technology proposals to customers and strengthening core technology competitive advantages. Through these efforts, we aim to achieve a return on equity (ROE) of over 15% by 2030."

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