LG Innotek suffers Q2 revenue drop, operating loss

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LG Innotek suffers Q2 revenue drop, operating loss

Published: 27 Jul. 2016, 20:49

LG Innotek, the electronics component affiliate of LG Group, saw a near 34 billion won ($30 million) operating loss in the second quarter, a turnaround from last year’s Q2 operating profit of near 49 billion won, largely due to a drop in demand for smartphone components.

According to the company on Wednesday, LG Innotek’s revenue fell 22.6 percent from a year ago to 1.12 trillion won. When compared to the first three months of this year, second-quarter revenue was down 6.2 percent. As a result, the company reported a net loss amounting to 31.9 billion won.

“The sluggish global economy along with slowing demand in the premium smartphone market has affected demand in related components,” an LG Innotek official said. “We plan on improving our business structure by strengthening the competitiveness of new businesses such as automotive parts.”

The company’s automotive parts revenue saw growth of 29 percent to mark 200.9 billion won compared to a year ago. The company said it has secured 1.1 trillion won worth of new orders on automotive components in the first half.

LG Innotek said it plans on strengthening its marketing toward North American smartphone clients releasing new models in the third quarter. Apple is said to be releasing its latest iPhone in mid-September.

The company said it will also expand its foothold in Asia, seeking new clients in China and investing nearly 22.8 billion won to set up an affiliate in Vietnam. The affiliate, LG Innotek Vietnam Hai Phong, will focus on camera modules to help raise the company’s price competitiveness.

BY LEE HO-JEONG [[email protected]]