LG Display swings to loss in part on sizable investmentsKorean display maker LG Display said Wednesday its net earnings swung to a loss last year due to a drop in large LCD panel prices.
The company, which has vowed to speed up the transition from LCD to OLED panels this year, logged a 179 billion won ($160 million) net deficit in 2018, compared with a net profit of 1.9 billion won from a year earlier.
Its annual operating profit tumbled 96.2 percent year-on-year to 92.9 billion won, and sales dropped 12.4 percent to 24.3 trillion won.
“The net loss was attributable to the falling prices of large LCD panels,” the company said.’
In the fourth quarter, LG Display’s net jumped 250 percent to 152.6 billion won, rising from dismal profit numbers posted a year earlier.
Its operating profit soared 528 percent to 279.3 billion won, while sales slipped 3 percent to 6.95 trillion won in the last three months of 2018.
The company said increased capital spending for OLED production facilities cut its profitability in the fourth quarter. LG Display has been expanding investment in organic light-emitting diode (OLED) panels to shift from the traditional liquid crystal display (LCD) panels that have been plagued by falling demand and global supply glut.
The company shipped 2.9 million large OLED panels last year, which accounted for over 20 percent of its total sales, turning to surplus for the first time in five years since the panels’ launch.
While demand for OLEDs have been picking up pace, LG Display anticipated the overall display market to remain tepid in the coming months due to downbeat demand and seasonal trends.
This year, LG Display said it will speed up the transition from LCD to OLED to get a bigger share of the premium TV and smartphone market.
“We will complete pre-emptive investment for future business within this year to take a lead in the OLED market and create stable profits,” Seo Dong-hee, the firm’s chief financial officer, said.
Shares of LG Display closed at 19,750 won on the Seoul bourse Wednesday, down 3.66 percent from the previous session. The earnings report was announced before the market opened.