It’s not only Australia where sales of LG Electronic products are tanking, in the UK sales have fallen over A$194M as consumers ditch their premium sticker prices.
The 14.2% slump is less than the 21% fall that the Australian operation reported.
In the UK it’s been revealed that arch rival Samsung is stripping share away from LG who appear to be more interested in collection data on their TV customers and then selling it to third parties as way to deliver profits.
Sales of LG OLED TV’s that incorporate their webOS data capture software have been hit by the entry of Samsung OLED TV’s, with their share of the TV market falling 7% as consumers choose a Samsung OLED TV over an LG OLED model.
Overall sales fell from A$1.27bn to A$1.09bn with the South Korean business also taking a big hit in the appliance market.
In the refrigerator market LG saw their market share fall to just 6.3% as the business tried to lift the price of their refrigerators which are being positioned in the premium market where they are struggling up against a multitude of European brands as well as the likes of Samsung who have grown their share of this market in the UK.
Desperate to stop the fall LG initiated a discount campaign that failed to deliver growth.
According to documents obtained from Company House in the UK, the business only managed to deliver a profit of A$19M despite revenues of over one billion dollars.
In the previous year profits were A$38M, what’s not known is how much revenue was pushed to other LG subsidiaries similar to what the Australian operation engages in.
In May ChannelNews revealed that LG Electronics sales for the last financial year as of December 2023, fell from $1.206 billion to $947M a fall of $259 million or 21% according to their latest financials, filed with the Australian Securities and Investment Commission.
We also revealed that in 2023 the business paid an increased dividend to LG Electronics Corporation of $35 million Vs a dividend payment in 2022 of $30 million this was despite a fall in both sales and profits.
In related party disclosures LG Electronics Australia Pty Ltd disclosed 34 LG entities that the business purchased goods from including the likes of LG CNS which has a balance of $469M owed to it for services in Australia in 2023 Vs $430M in 2022.
In the UK, the business paid a dividend in 2022 of A$103M to its parent company.
A statement signed off by the LG Electronics board said: “The international geopolitical landscape, including the Russia-Ukraine war and Israel-Palestine conflict remains challenging and commodity prices continue to rise, which could lead to a resurgence of inflation.”
LG Electronics added: “Like many businesses around the world, the company has experienced negative effects from inflation.
“Despite sales decreasing by 14.2 per cent compared to 2022, our business fundamentals were sound.
“In 2023, high inflation had a significant impact on the overall economy.
“Interest rates rose sharply, causing an increase in the cost of living, resulting in a decrease in real wages and purchasing power for the citizens”.
LG Electronics said that it forecasts its sales will “gradually recover” in 2024 but that its outlook “remains uncertain” due to high inflation and rising energy and material prices.
However, the business added that its market position “is still sound and strong.”
For 2023, the wider LG Electronics group, which is headquartered in South Korea, reported revenues of A93bn and an operating profit of $3.89bn a big chunk of that revenue and a large percentage of the profits came from selling data and advertising services captured from their TV’s and appliances.
