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LG Appliance Sales Surge But Bad News Coming

LG Electronics appliance business is on a roll despite shortages in Australia but there is bad news on the horizon with price rises tipped along with shortages of components.

The South Korean Company saw its home appliance business set a new record in 2021 with revenues jumping 21.7 percent to US $22.92 billion.

In the key US market LG even out-performed US rival Whirlpool.

The business delivered net sales of $22 billion, its earnings released last night revealed.

The appliance business in Australia includes refrigerators, washing machines, air conditioners and hygiene-related products.

Overall revenue at LG Electronics was up 28.7 percent.

Their home appliance operation was up 8.2 percent from the previous year despite the business facing component shortages and shipping problems.

The downside is that LG management are predicting a grim outlook for the year to come, due to raw material price hikes and port congestions.

The impact and uncertainties will be greater in its North America business with the Australian operation already facing shortages of stock with key appliance retailers already holding orders for LG appliances that are on back order.

Also coming according to management are price rises.

“Revenue growth in 2022 is forecast to decline year-on-year. Due to raw material prices and logistics costs, profitability is expected to slightly decline year-on-year,” Kim I-kueon, vice president in charge of H&A Business Management Division, said during the briefing.

Kim added that LG would go all out to mitigate the impact by implementing multisource and saving logistics costs.

Moreover, LG’s focus will lie on premium products and large-capacity goods, adding it is crucial to adapting to the change in consumer patterns with the advent of live commerce platforms and the metaverse, Kim also said.

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