LG Innotek Opens Era of 20 Trillion KRW Annual Sales... Q4 Operating Profit Hits Record High Thanks to Apple Effect (Comprehensive)

LG Innotek opened the era of annual sales exceeding 20 trillion won for the first time last year. In the fourth quarter of last year, operating profit surged 184.6% year-on-year to 483.7 billion won, thanks to the effect of its main client Apple. This is the highest quarterly performance ever recorded.

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LG Innotek announced on the 25th that it recorded sales of 20.6053 trillion won last year under the Korean International Financial Reporting Standards (K-IFRS). This figure represents a 5.2% increase compared to the previous year, marking the first time annual sales exceeded 20 trillion won. Operating profit for last year was 830.8 billion won, down 34.7% due to the global economic downturn and sluggish IT demand in the upstream market.

LG Innotek increased its performance by supplying parts for Apple's new smartphone, the iPhone 15 series, resulting in the highest quarterly performance in the fourth quarter of last year. Sales in the fourth quarter rose 15.4% year-on-year to 7.5586 trillion won, and operating profit increased 184.6% to 483.7 billion won. A company representative explained, "This is the result of the full-scale supply of high-value-added camera modules, three-dimensional (3D) sensing modules, and semiconductor substrates for new smartphone models."

By business segment, the core optical solutions business recorded sales of 6.7567 trillion won in the fourth quarter of last year, up 20% from the same period the previous year. This was thanks to increased sales of new products such as high-value-added camera modules and 3D sensing modules to major clients. Annual sales last year reached 17.29 trillion won, an 8% increase compared to the previous year.

Sales in the substrate materials business in the fourth quarter of last year fell 16% year-on-year to 327.5 billion won. The delayed recovery in demand for display component groups had an impact. Annual sales last year were 1.3221 trillion won, down 22% from the previous year.

Moon Hyuksoo, CEO of LG Innotek / [Photo by LG Innotek]

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In the automotive components business, sales in the fourth quarter of last year decreased 9% year-on-year to 384 billion won. Annual sales last year were 1.5676 trillion won, an 8% increase compared to the previous year. Notably, excluding vehicle cameras, the order backlog for automotive components last year reached 10.7 trillion won, surpassing 10 trillion won for the first time. LG Innotek is improving profitability in the automotive components business through recent product portfolio optimization and strengthening global supply chain management (SCM) capabilities.

Park Ji-hwan, LG Innotek’s Chief Financial Officer (CFO), said, "Although the uncertainty in the business environment is expected to remain high this year, LG Innotek will continue to grow its profit base by enhancing quality and price competitiveness through digital manufacturing process innovation." He added, "We will accelerate building a solid business structure by leading with core future mobility components such as sensing, communication, and lighting modules, as well as high-value-added semiconductor substrates like flip-chip ball grid array (FC-BGA)."

Meanwhile, LG Innotek recently signed a 'definitive agreement for equity investment and business cooperation' with Taiwanese lens manufacturer AOE Optronics. This contract involves LG Innotek investing equity in AOE, and the two companies plan to closely collaborate in the core optical components sector through a strategic partnership. They intend to accelerate their market entry into optical components for autonomous driving cameras and extended reality (XR) applications.

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