LG Electronics sales to be record high KRW 61 trillion…“Home appliances & TV in boom”
Kim Eun | silverkim@ | 2018-01-26 11:17:33
[Digital Times, Kim Eun] LG Electronics opened an era of KRW 60 trillion in annual sales for the first time last year. And operating profit amounted to KRW 2.47 trillion, the highest level since 2009.
On January 25, LG Electronics reported sales of KRW 61.3 trillion and operating profit of KRW 2.46 trillion on the consolidated basis last year. Sales and operating profit grew 10.9% and 84.5% YoY, respectively.
LG Electronics recorded sales of KRW 59.40 billion, the highest in 2014, followed by KRW 56.5 trillion in 2015 and KRW 55.367 trillion last year. However, this year `s first` annual sales of KRW 60 trillion `was achieved due to an increase in sales of core household appliances such as TVs, washing machines, refrigerators and improved profitability.
Especially, earnings of home appliances and TV businesses led by earnings growth led by premium strategy and cost competitiveness last year. The annual operating profit of the household appliance business (H & A + HE) last year exceeded the first 3 trillion won. The H & A division, which sells white goods such as refrigerators, washing machines, and air conditioners, has gained dominance in the global premium market, recording annual sales of 19.226 trillion won and operating profit of 1.48 trillion won. The H & A division`s operating margin was the highest at 7.7%.
The HE division, which led to the popularization of OLED TVs, posted an operating margin of 8.4%, up from an operating profit of 1.256 trillion won last year. Sales of premium LG Signature appliances and organic light-emitting diode (OLED) TVs also benefited from the year-end increase in marketing costs and seasonally low demand.
In the fourth quarter of last year, sales of H & A business headquarters were KRW 4.32 billion and operating profit was KRW 80.7 billion. Domestic sales of new products such as twin wash, dryer and styler increased, and sales increased 6.8% YoY thanks to robust sales in emerging markets such as Latin America and Asia.
Meanwhile, the HE division posted sales of KRW 5,447.1 billion and operating profit of KRW 383.5 billion in the fourth quarter. Sales of premium products such as OLED TVs and ultra-HD TVs increased 14.2% YoY. Especially, operating profit grew by 133.8% YoY despite higher marketing expenses in peak season.
The MC division, which is in charge of the mobile business, including smartphones, recorded a deficit for the 11th consecutive quarter through the fourth quarter of last year. In the fourth quarter, MC business division posted sales of KRW 3.55 trillion and operating loss of KRW 213.2 billion. Despite a 3% YoY increase in sales, the company has been in a deficit since the second quarter due to sluggish smartphone sales. MC`s operating loss recorded a net loss for 11 consecutive quarters last year totaling KRW 721.1 billion. LG Electronics replaced the head of MC business division with Hwang Jung-hwan as vice president through CEO greetings earlier this year.
In the fourth quarter of last year, the VC division, which car parts business, recorded sales of KRW 856.7 billion and operating loss of KRW 41.1 billion. Although sales increased due to increased sales of electric car parts, sales of finished cars for some customers in the automotive infotainment business fell temporarily, resulting in operating losses.
LG Electronics stated that it plans to expand sales of premium home appliances this year by launching its twin-wash washer and knock-on magic face refrigerator. He added that the focus will be on strengthening the TV business with two major sporting events, the PyeongChang Winter Olympics and the Russia World Cup.
By Kim Eun silverkim@
[ copyright ⓒ The Digitaltimes ]
On January 25, LG Electronics reported sales of KRW 61.3 trillion and operating profit of KRW 2.46 trillion on the consolidated basis last year. Sales and operating profit grew 10.9% and 84.5% YoY, respectively.
LG Electronics recorded sales of KRW 59.40 billion, the highest in 2014, followed by KRW 56.5 trillion in 2015 and KRW 55.367 trillion last year. However, this year `s first` annual sales of KRW 60 trillion `was achieved due to an increase in sales of core household appliances such as TVs, washing machines, refrigerators and improved profitability.
Especially, earnings of home appliances and TV businesses led by earnings growth led by premium strategy and cost competitiveness last year. The annual operating profit of the household appliance business (H & A + HE) last year exceeded the first 3 trillion won. The H & A division, which sells white goods such as refrigerators, washing machines, and air conditioners, has gained dominance in the global premium market, recording annual sales of 19.226 trillion won and operating profit of 1.48 trillion won. The H & A division`s operating margin was the highest at 7.7%.
The HE division, which led to the popularization of OLED TVs, posted an operating margin of 8.4%, up from an operating profit of 1.256 trillion won last year. Sales of premium LG Signature appliances and organic light-emitting diode (OLED) TVs also benefited from the year-end increase in marketing costs and seasonally low demand.
In the fourth quarter of last year, sales of H & A business headquarters were KRW 4.32 billion and operating profit was KRW 80.7 billion. Domestic sales of new products such as twin wash, dryer and styler increased, and sales increased 6.8% YoY thanks to robust sales in emerging markets such as Latin America and Asia.
Meanwhile, the HE division posted sales of KRW 5,447.1 billion and operating profit of KRW 383.5 billion in the fourth quarter. Sales of premium products such as OLED TVs and ultra-HD TVs increased 14.2% YoY. Especially, operating profit grew by 133.8% YoY despite higher marketing expenses in peak season.
The MC division, which is in charge of the mobile business, including smartphones, recorded a deficit for the 11th consecutive quarter through the fourth quarter of last year. In the fourth quarter, MC business division posted sales of KRW 3.55 trillion and operating loss of KRW 213.2 billion. Despite a 3% YoY increase in sales, the company has been in a deficit since the second quarter due to sluggish smartphone sales. MC`s operating loss recorded a net loss for 11 consecutive quarters last year totaling KRW 721.1 billion. LG Electronics replaced the head of MC business division with Hwang Jung-hwan as vice president through CEO greetings earlier this year.
In the fourth quarter of last year, the VC division, which car parts business, recorded sales of KRW 856.7 billion and operating loss of KRW 41.1 billion. Although sales increased due to increased sales of electric car parts, sales of finished cars for some customers in the automotive infotainment business fell temporarily, resulting in operating losses.
LG Electronics stated that it plans to expand sales of premium home appliances this year by launching its twin-wash washer and knock-on magic face refrigerator. He added that the focus will be on strengthening the TV business with two major sporting events, the PyeongChang Winter Olympics and the Russia World Cup.
By Kim Eun silverkim@