LG posts 61% surge in Q2 operating profit to $869 million on core businesses

Industry

Published: 25 Jul. 2024, 14:35 Updated: 25 Jul. 2024, 19:20

LG posts 61% surge in Q2 operating profit to $869 million on core businesses

LG Twin Tower in western Seoul [NEWS1]

LG Electronics posted 1.2 trillion won ($869.4 million) in operating profit for the second quarter, a 61.2 percent on-year surge driven by its primary businesses in household appliances and automobile components.

The figure matched the electronic maker’s preliminary earnings report released earlier in the month, and exceeded the market consensus of 979.6 billion won compiled by market tracker FnGuide.

Quarterly revenue jumped 8.5 percent on year to post 21.7 trillion won, also in line with LG’s expectations. The figure was slightly higher than the market projection of 21.3 trillion won.

Net profit for the April-June period skyrocketed 222.3 percent on year to 629.5 billion won, beating the market consensus of 628 billion won.

In the household appliance sector, operating profit rose 16 percent to 694.4 billion won, and revenue increased 11 percent to post a record-high 8.8 trillion won.

The electronics maker is seeing particular growth in its subscription models for home appliances, with related revenue surpassing 1 trillion won for 2023.

Starting with Malaysia, LG plans to expand its subscription models to overseas nations including Taiwan, Thailand and India within the year.

For automobile components, the division swung black to log an operating profit of 81.7 billion won. Revenue saw a 1 percent increase to post 2.7 trillion won.

Despite global EV slowdown, the company is still seeing continued order backlog and expects the value of its backlogged orders to surpass 100 trillion won this year.

The company also expressed confidence in its Business-to-Business (B2B) sector including heating, ventilation and air conditioning (HVAC) equipment.

The proportion of sales from the B2B sector for the first six months this year reached 35 percent of the total, which exceeds the company’s prior achievements, LG Electronics said on the conference call.

“With energy regulations and green initiatives being strengthened in advanced markets, we expect new demand for high-efficiency air solution products based on heat pumps to grow quickly,” LG said. “We are currently securing orders in those markets for high-efficiency chiller products.”

In the home entertainment sector, which includes TVs, the company reported 97 billion won in operating profit and 3.6 trillion won in revenue.

In business solutions, it logged 5.9 billion won in operating loss and 1.46 trillion won in revenue, citing loss to rising costs in areas such as liquid crystal display panel prices and investments in EV charging and robotics.

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