LG Electronics logs record-high revenue in Q1 on B2B push

LG Electronics Inc. raked in its largest-ever quarterly revenue in the first quarter of this year, maintaining upward momentum after a stellar 2023, but its operating profit declined on heavy marketing costs for new home appliance products launched this year.

Revenue at the South Korean home appliances leader came in at 21.10 trillion won ($15.6 billion) in the January-March quarter on a preliminary basis, the company said on Friday.

That marked its highest-ever quarterly revenue and a 3.3% growth compared to 20.42 trillion won in the same period last year.

LG said that subscription-based services and business-to-business (B2B) sales of home devices were the main growth drivers as it transforms into a smart life solution platform company from a white goods manufacturer.

B2B sales include heating ventilation and air conditioning (HVAC) equipment installed in commercial and residential buildings, as well as built-in home devices and electronic components supplied to corporate customers.

Despite the sales growth, its preliminary operating profit fell 11% on-year to 1.33 trillion won ($984 million) in the first quarter on subdued demand amid the economic slowdown. The first-quarter earnings compared to 1.50 trillion won in the year-earlier period.

Still, its quarterly profit has remained steady at the 1 trillion level since the first quarter of 2020.

LG will provide breakdowns of the quarterly results, including net profit, later this month.

“LG Electronics will further accelerate the shift to the subscription business that allows customers to choose the home appliances and product management services they want according to their lifestyle,” the company said in a statement.

In tandem with the AI boom, its home appliances are also evolving into "empathetic intelligence devices" that cater to consumer needs.

In the first quarter, LG unveiled its 2024 lineup of premium home appliances, including the All-New Styler steam closet and the All-In-One Washer-Dryer Combo.

AUTOMOTIVE ELECTRONICS

For automotive electronic components, including in-vehicle infotainment software, LG said its order backlog is on course to exceed 100 trillion won in the first half of this year, up from 90 trillion won at the end of last year.

LG Magna e-Powertrain Co., an electric vehicle parts joint venture between LG Electronics and Canada’s Magna International Inc., is expected to bolster LG's vehicle component business.

The venture turned a profit in 2023 and is gearing up for forays into Europe and Asia.

LG Electronics reaped 84.23 trillion won in revenue on a consolidated basis in 2023, posting record annual sales for three years straight thanks to robust sales of home appliances and vehicle components.

Last year, its Chief Executive Cho Joo-wan unveiled the company’s bold vision to achieve 100 trillion won in annual sales by 2030, led by smart home devices that connect an array of consumer experiences.

Write to Jeong-Soo Hwang at hjs@hankyung.com
Yeonhee Kim edited this article