LG Electronics posts record Q2 profit, to accelerate transition into AI leader
Eui-Myung Park
8 HOURS AGO
LG's built-in home appliances LG Electronics Inc., a leading South Korean electronics maker, on Thursday posted its highest quarterly operating profit and sales for the April-June period thanks to robust sales of home appliances and vehicle components.
With a steady cash flow from its mainstay businesses, the company is expected to ramp up efforts to transform into an artificial intelligence-based company with a focus on future mobility, robots and smart factories, analysts said.
LG said in a regulatory filing that its quarterly operating profit rose 61.2% on-year to 1.2 trillion won ($868 million) while sales gained 8.5% to 21.7 trillion won – both all-time highs for the second quarter.
The results largely came in line with the preliminary figures LG announced earlier this year.
(Graphics by Dongbeom Yun) LG’s home appliance and air solution (H&A) division saw record-setting quarterly sales of 8.84 trillion won, up 11% from the year-earlier period, boosted by sales of a suite of high-class consumer goods sold under the LG Objet Collection brand.
The segment’s operating profit rose 16% on-year to 694.4 billion won.
The company said it intends to remain agile in adapting to market shifts and to continue expanding its business-to-business (B2B) segment, particularly the heating, ventilation and air conditioning (HVAC) systems and built-in appliance businesses.
It said its recent acquisition of Athom B.V., a Netherlands-based home automation company, is expected to create synergy within its home appliance sector.
LG’s vehicle component solutions business, LG’s new growth driver, contributed 2.7 trillion won in sales, up 1% from a year earlier. The division posted 81.7 billion won in operating profit, a turnaround from the year-earlier period.
LG Electronics CEO Cho Joo-wan unveils LG's future business strategy Sales from LG’s Home Entertainment division, which makes TVs, posted 97 billion won in operating profit on sales of 3.63 trillion won, driven by a recovery in demand in Europe, a key market for premium OLED TVs.
LG’s business-to-business division posted 5.9 billion won in operating losses on sales of 1.46 trillion won due to heavy spending on new businesses, including electric vehicle chargers and robots.
Industry officials expect LG to post over 1 trillion won in overall operating profit in the third quarter, boosted by HVAC, built-in appliances and B2B businesses.
LG's vehicle component business is one of its growth drivers Analysts said LG’s business strategy – targeting high-end consumers with tailor-made functions equipped with smart technology – has put the Korean company ahead of its rivals such as Whirlpool Corp.
Meanwhile, the electronics maker’s affiliate LG Display Co. said on Thursday it posted 93.7 billion won in second-quarter operating losses, sharply narrowed from a loss of 881.5 billion won a year ago, thanks to strong sales of OLEDs for large-screen TVs.