LG Electronics Achieves Best Half-Year Performance with Objet and OLED... "Automotive and Premium Sectors to Make Bold Moves in Second Half" (Comprehensive)

Yeouido LG Twin Towers, Seoul / Photo by Honam Moon munonam@

[Asia Economy Reporters Heungsun Kim, Suyeon Woo, Hyunjin Jung] LG Electronics achieved its highest-ever half-year performance in the first half of this year, driven by strong business in premium home appliances and TV segments. While restructuring its smartphone business, which had been operating at a loss, the company plans to strengthen its market dominance in the second half through premium products and automotive components, focusing on its core home appliance business.

On the 29th, LG Electronics announced that its sales and operating profit for the first half of this year reached KRW 34.9263 trillion and KRW 2.88 trillion, respectively, marking the highest half-year results in its history. Consolidated sales for the second quarter were KRW 17.1139 trillion, and operating profit was KRW 1.1127 trillion. These figures represent increases of 48.4% and 65.5% compared to the same period last year. The sales figure is the highest ever recorded for the second quarter, and the operating profit exceeded KRW 1 trillion for the second consecutive quarter for the first time in history.

H&A Division Sets Record for Highest Quarterly Sales for Second Consecutive Quarter
Dominant Market Share in OLED TV

By segment, the Home Appliance & Air Solution (H&A) Business Division achieved sales of KRW 6.8149 trillion and operating profit of KRW 653.6 billion. The second quarter sales, which broke the record for the highest quarterly sales, grew 32.1% year-on-year, driven by growth across all overseas regions. Operating profit improved by 6.8% year-on-year due to expanded sales and efficient resource management.

The steady popularity of LG Objet Collection, a space interior appliance line, propelled the H&A division's performance. Increased time spent at home contributed to strong sales of convenience-enhancing products such as dryers, dishwashers, and cordless vacuum cleaners.

During the second-quarter earnings conference call, LG Electronics stated, "Objet Collection sales continue to show a steady upward trend with double-digit high profitability," adding, "We will establish a premium brand through LG’s unique design, functionality, and performance differentiation."

The Home Entertainment (HE) Business Division, responsible for TVs, recorded sales of KRW 4.0426 trillion and operating profit of KRW 333.5 billion. Sales and operating profit increased by 79.1% and 216.4%, respectively, compared to the same period last year. Strong sales of premium TVs, including the LG OLED Evo, an organic light-emitting diode (OLED) TV, drove the growth. Notably, OLED TV sales surged significantly, accounting for more than 30% of total TV sales.

LG Electronics stated, "Our OLED market share stands at around 70%, establishing a dominant market position," and added, "We expect this market position to continue in the future."

LG Objet Collection [Photo by LG Electronics]

'Future Growth Engine' Automotive Components Expected to Turn Profitable in Second Half
Optimistic Outlook for Premium Home Appliances

The Vehicle Components (VS) Business Division, which LG Electronics positions as a future growth engine, posted sales of KRW 1.8847 trillion and an operating loss of KRW 103.2 billion. Sales more than doubled year-on-year due to recovery in demand from global automakers, increased supply for key projects, and sales of electric vehicle parts. However, operating losses increased compared to the previous quarter due to temporary cost rises caused by vehicle semiconductor supply issues and rising component prices.

The Business Solutions (BS) Business Division, which sells information displays, recorded sales of KRW 1.6854 trillion and operating profit of KRW 61.7 billion. Continued strong sales of IT products such as PCs and monitors, along with a recovery in the construction market, led to a 28.9% increase in sales year-on-year. Operating profit slightly declined year-on-year due to rising prices of key components and logistics costs.

The company expects the automotive components division to return to profitability in the fourth quarter of this year. An LG Electronics official said, "We aim to turn profitable through additional sales growth from easing semiconductor supply issues in the second half and internal cost reduction effects," adding, "Considering the secured order backlog and expected cost improvements, we anticipate continued sales growth and profitability structure changes next year."

Additionally, LG Electronics plans to strengthen market dominance in its core businesses such as home appliances and TVs, while accelerating growth in nurturing businesses like B2B to expand sales. The strategy includes securing profitability through continuous cost structure improvements and proactive, optimized operations aligned with market changes.

In the home appliance sector, competition among companies is intensifying, and there are cost pressures from rising raw material prices and logistics expenses. The H&A Business Division plans to sustain sales growth by enhancing product competitiveness and implementing tailored sales strategies by region and product. Operating profit is expected to remain at the same level as the previous year through cost structure improvements and optimized resource allocation.

Regarding the TV market, demand for premium TVs is expected to continue increasing. The HE Business Division plans to expand sales centered on premium products, including OLED TVs, to increase revenue and maintain solid profitability. The B2B Business Division aims to increase sales by expanding sales of premium products and securing profitability through efficient resource management.

An LG Electronics official stated, "Uncertainties remain due to intensified global competition, rising raw material prices, increased logistics costs, and concerns over the spread of COVID-19 variants," but added, "We will enhance market dominance centered on our core businesses, home appliances and TVs, by advancing our business portfolio."