"Advancing Order-Based Business and OLED-Centered Business Structure"
"Efforts to Expand Mobile OLED Product Shipments"
"Timely Preparation for IT OLED Mass Production and Supply System Next Year"
LG Display announced on the 26th that it recorded a consolidated operating loss of 881.5 billion KRW in the second quarter. Sales amounted to 4.7386 trillion KRW.
Operating profit decreased by 80.5% and sales by 15.49% compared to the same period last year. LG Display explained that although it posted a loss, the scale of the loss narrowed compared to the previous quarter. In the first quarter, it recorded an operating loss of 1.0984 trillion KRW.
In the second quarter, panel purchase demand for mid-to-large sized products including OLED TVs increased, leading to higher shipments. Shipment area increased by 11% and sales by 7% compared to the previous quarter. LG Display stated, "With expanded shipments, cost innovation, strengthened inventory management, and operational efficiency improvements, cost reduction activities have reduced the scale of losses compared to the previous quarter."
The sales composition by product in the second quarter was 24% for TV panels, 42% for IT panels (monitors, notebook PCs, tablets, etc.), 23% for mobile panels and other products, and 11% for automotive panels. The net loss for the period was 698.8 billion KRW. EBITDA (earnings before interest, taxes, depreciation, and amortization) was 129.7 billion KRW (profit margin 3%).
LG Display's policy is to strengthen the company's fundamentals by advancing its business structure. The plan is to improve the business structure centered on 'order-based business' and increase the proportion of the OLED business. The advantage of order-based business is that if collaboration with customers is good, logistics and pricing can be managed stably. LG Display said, "The proportion of order-based business in total company sales is expected to exceed 40% this year and expand to over 50% next year, with a goal of reaching around 70% within 2 to 3 years."
The company plans to increase the OLED proportion and business competitiveness across all large and small product lines. The company expects the OLED share of total sales to exceed 50% this year.
In the small and medium OLED sector, the plan is to expand mobile product shipments based on increased production capacity. They aim to further solidify IT OLED technology leadership and secure mass production and supply systems without disruption next year.
The automotive display business will focus on expanding sales and orders based on technological competitiveness encompassing Tandem OLED and high-end LCD.
In the large OLED sector, the strategy is to strengthen OLED positioning in the premium TV market and actively target new markets such as gaming and transparent OLED.
Kim Seong-hyun, CFO (Chief Financial Officer) of LG Display, said, "We believe that the inventory adjustment in the upstream industry, which has continued since last year, has largely progressed as of the first half of the year," adding, "In the second half, we expect panel purchase demand to increase due to overall industry inventory health recovery and order-based business performance to improve with increased mobile product shipments."
CFO Kim forecasted that the company will turn profitable in the fourth quarter. He said, "We expect to return to profitability in the fourth quarter," and added, "We will accelerate business structure advancement, strengthen financial soundness, and improve business performance."
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