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Earnings

LG enjoys record half-year earnings on TV, appliance in H1

Q2 operating profit up 66%, revenue up 48%

By Jul 29, 2021 (Gmt+09:00)

LG Electronics home appliance products.
LG Electronics home appliance products.

LG Electronics Inc. posted record-high operating profit and revenue in the first half thanks to stella performance in TV and home appliance business.

The South Korean home appliance giant on July 29 said its operating profit reached 2.9 trillion won ($2.5 billion) with sales of 34.9 trillion won during the January-June period, all-time highs in any half-year earnings.

In the second quarter, operating profit surged 65.5% to 1.1 trillion won from a year earlier on a consolidated basis. Its revenue during the period grew 48.4% on-year to 17.1 trillion won.

LG is predicted to keep posting record earnings in the third quarter, analysts said. Some forecast its annual sales and operating profit may exceed 70 trillion won and 4 trillion won for the first time, respectively.

“We will maintain earnings momentum by strengthening our market dominance, especially in key business such as home appliance and TV, while upgrading business portfolio,” said a company official. “There is still uncertainty due to concerns over the spread of coronavirus variants, in addition to rising costs of raw materials and logistics.”

BETTER THAN WHIRLPOOL

LG’s home appliance and air solution division reported 653.6 billion won in operating profit during the second quarter, 6.8% up from a year ago, with sales rising 32.1% to 6.8 trillion won ($$5.9 billion). The revenue compared with a US competitor Whirlpool Corp.’s quarterly sales of $5.3 billion. An annual revenue of LG’s home appliance unit is expected to surpass sales of Whirlpool as the division keeps reporting healthy sales, the industry sources said.

LG’s TV unit posted a 216.4% surge in operating profit to 333.5 billion won as sales jumped 79.1% to 4 trillion won thanks to the growing popularity of premium Organic Light Emitting Diodes (OLED) TV models and the recovery of the global TV market.

The company’s vehicle component solutions (VS) division, which is in charge of auto parts business, achieved sales of 1.9 trillion won, a 106.5% growth, on a recovery in demand from global automakers. The unit, however, reported 103.2 billion won in operating loss as the global chip shortage ramped up costs of components the unit purchases.

Sales by the business solutions division grew 28.9% to 1.7 trillion won, but operating profit of the unit for PCs and monitors declined to 61.7 billion won due to rising parts and logistics costs.

Write to Hyung-suk Song at click@hankyung.com

Jongwoo Cheon edited this article.

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