[Asia Economy Reporter Jeong Hyunjin] LG Display announced on the 27th that it recorded sales of 7.2232 trillion KRW and an operating profit of 528.9 billion KRW in the third quarter of this year. Sales increased by 3.7% compared to the previous quarter and by 7.2% compared to the same period last year, while operating profit decreased by 24.6% compared to the previous quarter but increased by 221.8% compared to the same period last year.
LG Display explained that sales increased compared to the previous quarter due to the expansion of shipments of IT panels, but operating profit decreased by 25% compared to the last quarter due to the decline in prices of liquid crystal display (LCD) TV panels, rising material costs caused by supply issues of parts within the industry, and increased costs from the operation of new facilities.
Looking at the product groups, IT panels accounted for the largest share of sales at 45%, TV panels accounted for 32%, and mobile panels accounted for 23%. In particular, large organic light-emitting diode (OLED) panels, which are strengthening their market position, are expected to achieve the annual sales target of 8 million units and turn a profit for the year. LG Display stated that LCD is shifting its business structure to focus on IT to reduce volatility, and is delivering results through high-end products and technological differentiation, as well as cooperation with global strategic customers.
LG Display expects that in the fourth quarter, shipment area will increase by the mid-teens percentage compared to the third quarter as shipments delayed due to parts supply issues recover. Although LCD TV panel prices are expected to continue declining, the shipment of mobile products, which have relatively higher prices per area, is expected to increase, leading to a slight rise in price per area.
LG Display Chief Financial Officer (CFO) Executive Vice President Seo Donghee said, "The LCD business has proactively shifted capacity to competitive IT segments and strengthened cooperative relationships with strategic customers to minimize the impact of market volatility and establish a stable business structure capable of generating profits." He added, "Based on this, we plan to continuously generate profits in differentiated areas such as IT and commercial sectors."
He continued, "Although the global TV market has recently contracted, the high-end TV market is growing, resulting in market polarization. Due to increased TV usage, longer usage times, and the rise of high-quality content, consumers’ willingness to pay is increasing, and the trend of preferring high-spec products is spreading, so sales of OLED TVs are expected to expand further."
Meanwhile, LG Display’s net profit for the third quarter was 463.5 billion KRW, and earnings before interest, taxes, depreciation, and amortization (EBITDA) was 1.696 trillion KRW.
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