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LG announces first quarter operating profit of $801.25m

May 02. 2019
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By The Nation

LG Electronics (LG) announced in a press release on Thursday consolidated sales of US$13.27 billion (Bt424 billion) and operating profit of US$801.25 million for the first quarter of 2019.

Although overall first-quarter revenues and operating income declined somewhat in 2019 versus 2018, the home appliance company reported record first-quarter sales and profits, the company said. 

Operating income was 1,090 per cent higher than the fourth quarter of 2018, reflecting improved cost structures across major business units, the company added.

The LG Home Appliance & Air Solution Company generated first-quarter revenues of US$4.86 billion and operating profit of US$647.3 million, the highest quarterly revenue and operating income for the business unit in LG history. 

Sales were especially strong in Europe and Asia, contributing to growth of 11 per cent year-on-year and 26 per cent quarter-on-quarter on robust sales of premium and growth products especially in the domestic Korean market. 

The increase in operating profit of more than 30 per cent from the same period last year also can be attributed to the growing popularity of high-growth products such as Styler, clothes dryers, air purifiers and vacuum cleaners as well as effective cost reduction efforts.

The LG Home Entertainment Company reported first-quarter revenues of US$3.58 billion and operating profit of US$308.27 million, a decrease of 3 per cent from the same period the previous year due to seasonal weakness in demand and the lack of global sporting events. 

Operating income increased significantly from the previous quarter thanks to greater marketing efficiencies and improvement cost structure. The launch of new 2019 premium products including OLED TVs, NanoCell TVs and large-screen Ultra HD TVs is expected to generate additional sales opportunities in the second quarter.

The LG Mobile Communications Company saw first-quarter sales of US$1.34 billion and narrowed its quarterly operating loss to US$181.05 million as LG continues to rebuild its smartphone business. 

Operating results improved from the previous quarter as a result of stronger business structure. 

Looking ahead, the launch of LG V50ThinQ 5G smartphone is expected to create positive momentum in the second quarter while the relocation of LG’s smartphone manufacturing center from Pyeongtaek, Korea to Haiphong, Vietnam will help improve profitability and LG’s global competitiveness in the second half of the year.

The LG Vehicle Component Solutions Company recorded first-quarter revenues of US$1.20 billion, a 61 per cent increase from the same period last year. 

Increased sales at ZKW contributed to an improvement in operating results despite rising raw material prices and initial production costs associated with new projects. 

Trends in the global auto market associated with low fuel prices and increased sales of luxury vehicles and SUVs will create more opportunities for LG’s automotive components business.

The LG Business Solutions Company posted first-quarter sales of US$556.58 million, 5 per cent higher than the previous quarter and 3 per cent lower than the first quarter a year ago. 

Operating profit of US$49.38 million was 272 per cent higher than the previous quarter but 3 per cent lower year-on-year due to the impact of US tariffs on solar module imports and ongoing significant price erosion in major markets. 

The information display business plans to improve profitability by expanding sales of premium displays and LED products.

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