LG Household & Health Care reports big miss in fourth quarter

[LG HOUSEHOLD & HEALTHCARE]

LG Household & Health Care reported a net loss of 108.8 billion won ($87.9 million) in the final quarter of last year, its first quarterly deficit in 18 years due to shrinking consumer demand and China’s sealing off its borders amid the Covid-19 pandemic.

The loss is a dramatic switch from a net profit of 136.4 billion won in the year-earlier period, and dramatically lower than the 86-billion-won consensus compiled by FnGuide.

The company’s operating profit fell 46.5 percent to 128.9 billion won during the September-to-December period. Quarterly sales fell 10.6 percent to 1.8 trillion won.

The cosmetics and household goods maker said raw material price increases, heightened competition in the market and a decrease in sales led fall in quarterly operating profit, especially due to low demand from the Chinese market.

Full year, net profit nosedived 70 percent to 258.3 billion won, while operating profit plummeted 44.9 percent to 711.1 billion won. Sales shrunk 11.2 percent to 7.19 trillion won.

The beauty business was particularly hit hard during the fourth quarter of 2022. Operating profit fell 57.7 percent to 79.2 billion won, while sales fell 23.7 percent to 870.1 billion won compared to 2021’s fourth quarter.

Its Chinese market and duty free channels suffered as well, which impacted sales, the company said.

Operating profit for its home care and daily beauty business dipped 6.7 percent on-year to 18.9 billion won in the last quarter of 2022, while sales upped by five percent from 2021’s fourth quarter to 526.5 billion won.

The company's refreshment business recorded an operating profit of 30.8 billion won, down 8.1 percent on-year.

BY LEE JAE-LIM [lee.jaelim@joongang.co.kr]