LG Electronics profit slumps as home appliances struggle to sell

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LG Electronics profit slumps as home appliances struggle to sell

LG Electronics booth at CES 2025 [YONHAP]

LG Electronics booth at CES 2025 [YONHAP]

LG Electronics logged 6.4 percent drop in operating profit due to slow demand recovery in global home appliances and surge in logistic costs last year, the company said. 
 
The Korean electronics giant posted 3.4 trillion won ($2.4 billion) in operating profit for the full year of 2024, according to its earnings announcement on Thursday, falling short of 3.7 trillion won market consensus compiled by FnGuide.
 
Its revenue marked a record high of 87.7 trillion won during the same period.
 
Growth of home appliance and vehicle solutions businesses contributed to the record-high generation of revenue in 2024, the company explained. Its TV and business-to-business sales also improved its sales last year.
 
Its fourth quarter net loss deepened from a year earlier as a weak won pushed up foreign exchange translation losses.
 
The company posted a net loss of 713.7 billion won in the three months that ended Dec. 31, compared with a net loss of 76.4 billion won in the fourth quarter of 2023, the company said in a regulatory filing.
 
“Increased translation losses of [dollar-denominated] financial debt and interest costs held by the company's overseas subsidiaries further cut into the bottom line,” a company spokesperson said over the phone.
 
The dollar rose to an average of 1,396.84 won in the fourth quarter from 1,320.84 won a year earlier, data from the Bank of Korea showed.
 
Operating profit plunged 56.7 percent to 135.4 billion won in the fourth quarter from 312.5 billion won a year ago.
 
In the October-December period, higher marketing costs to boost home appliance sales amid lackluster consumer spending and sharply increased logistics costs also weighed on operating profit, the company said in a press release.
 
Sales inched up 0.1 percent to 22.76 trillion won from 22.73 trillion won over the cited period.
 
To ride out the rapidly changing business environment, LG Electronics will continue to reorganize its home appliance-centered business portfolios and secure new growth drivers, the release said.
 
While strengthening its mainstay home appliance business, the company will introduce high-end products equipped with artificial intelligence (AI), as well as advanced vehicle solutions for upcoming software-defined vehicles, it said.
 

BY JIN EUN-SOO, YONHAP [[email protected]]
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