LG Post Record Q1 Appliance Profit, Mobile Slumps
LG’s loss-making mobile business has impaired record Q1 home appliance profit and revenues, notching a 20.8% decline in company net profit.
For three months to March 31, the Korean giant generated net profit of 578 billion won (US$496 million), down from 730 billion won the year prior.
Sales for the quarter slipped 1.4% YoY to 14.9 trillion won, with operating profit diving 18.7%.
LG’s home appliance and air solution division achieved a record operating profit of 728 billion won (US$625 million), citing strong sales of air purifiers, and ‘clothing care’ appliances.
Unit revenue climbed to US$4.86 billion – the unit’s highest quarterly revenue and operating income in company history.
The home entertainment division notched a 2.9% year-on-year decline in operating profit to 346.5 billion won (US$297 million).
The Korean giant is forecasting global demand for TVs to slightly dip this year, but will further expand its premium portfolio.
The mobile communications division has continued to impair earnings, posting a 203.5 billion won (US$174 million) operating loss – it’s eighth straight quarterly deficit.
The news comes as LG ceases to produce mobile phones in South Korea by year end, moving to Vietnam in a cost-cutting exercise.
The Korean giant has set its sights on 5G to resurrect its mobile division, but warns global smartphone demand will remain stagnant in Q2.
LG’s 5G handset is expected to “create positive momentum in the second quarter while the relocation of LG’s smartphone manufacturing center in Pyeongtaek, [South] Korea to Haiphong, Vietnam will help improve profitability and LG’s global competitiveness in the second half of the year.”