LG Display Q1 net income sharply down on sluggish demand

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LG Display Q1 net income sharply down on sluggish demand

LG Display, a major display panel maker, said Wednesday its first-quarter net income fell nearly 80 percent from a year ago, driven by lower demand for IT products and falling TV panel prices.

Its net for the three months ending in March came to 54.3 billion won ($43 million), down 79.6 percent from a year earlier, the company said in a regulatory filing.
The company posted 38.3 billion won in operating profit for the January-March period, compared with 523.4 billion won a year ago. Sales fell 6 percent to 6.47 trillion won.
The operating profit was 62.5 percent lower than the average estimate surveyed by Yonhap Infomax, the financial data firm of Yonhap News Agency.
The company blamed the poor performance in the quarter on the traditionally low season for IT products, coupled with difficulties in securing parts and delivering set products, especially amid the prolonged lockdowns in China.
Prices of 55-inch liquid crystal display (LCD) panels for TVs have fallen about 47 percent from August last year.
The LCD panel business takes up around 60 percent of its total sales, while organic light-emitting diode (OLED) panels account for around 30 percent.
But the company said it expected its profitability to begin improving in the second quarter with the increased adoption of its newest OLED TV technology, OLED.EX.
The company, the world's sole supplier of large OLED panels for TVs, said the new panels can deliver better picture quality by enhancing brightness up to 30 percent compared with conventional OLED displays.
"While the overall demand is on the decline, there is a chance for us to grow further in the high-end TV market," the company said in the statement, adding it will continue to focus on the OLED business.
While the overall TV market shrank 10 percent, sales of OLED TV sets grew over 40 percent in the first quarter thanks to technological advances and differentiated product lines, the company said in a conference call on Wednesday afternoon.
Given the trend from April, the shipments and profitability of its OLED panels are likely to pick up from the second quarter, the company said.
In the LCD market, the company will respond to aggressive pricing strategies by Chinese panel makers by reducing the portion of non-competitive products to be able to manage risks.
Demand for LCD panels has been waning as most countries have lifted pandemic restrictions and people spend less at home and on personal IT devices. Enterprise demand has also been slower than expected, the company said, due to the hostile macro environment.
"The demand uncertainties are unlikely to go away any time soon, and this means that there is going to be some down cycle continuing this year and moving into next year," the company said.
On the potential deal to supply OLED panels to Samsung Electronics, "There is nothing to say for certain at this stage," Kim Sung-hyun, senior vice president and CFO at LG Display, said during the call.
"The possibilities are open and needs between the two companies have to be aligned (to ink any deal)," he said.
LG Display shares retreated 3.87 percent to close at 17,400 won, versus the wider market's 1.1 percent decline.

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