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LG Household & Health Care reports 96.3 billion won in net for Q1

Published: 27 Apr. 2023, 17:57

LG Household & Health Care's headquarters in Gwanghwamun, central Seoul [LG HOUSEHOLD & HEALTH CARE]

LG Household & Health Care reported a lower-than-expected net profit of 96.3 billion won ($71.88 million) in the first quarter, down 15.3 percent on year, citing headwinds on increased costs.

The figure failed to surpass market expectations of 102.9 billion won compiled by FnGuide.

Sales inched up 2.4 percent on year to 1.68 trillion won, slightly higher than analyst expectations of 1.65 trillion won.

LG Household & Health Care has three divisions: beauty, home care and daily beauty, and refreshment.

Sales in the beauty division remained flat, increasing 0.3 percent on year to 701.5 billion won. Operating profit fell 11.3 percent to 61.2 billion won.

The company cited slow consumption recovery from China's delayed growth. Sales from China suffered a double-digit drop. Operating profits fell due to cost pressure and increased fixed costs.

Sales in home care and daily beauty logged sales of 563 billion won, up 1.9 percent on year. Operating profit plummeted 40.7 percent to 32.7 billion won.

Oral care brands Perioe and Euthymol contributed to sales growth, as well as daily beauty care brand Physiogel. Operating profit took a toll due to the cost pressures from inflation and increased fixed costs.

The division will continue to strengthen its brand portfolio by releasing new products such as the Dr. Groot Density Intensive Care shampoo for hair loss and whitening toothpaste Euthymol.

Refreshment sales surged 6.7 percent on year to 419.2 billion won, while operating profit inched upwards 1.3 percent to 52 billion won.

Strong sales in Coca-Cola Zero and Monster Energy drinks contributed to the sales increase. The growth was also fueled by increased sales from physical stores due to increased outdoor activities as the weather gets warmer and new Covid-19 cases dwindle. The company also introduced a line of zero-sugar beverages such as Powerade Zero and Fanta Zero Grape and Pineapple to meet the growing consumer demand for such products.

BY LEE JAE-LIM [[email protected]]