Q2 Revenue 21.6944 Trillion KRW, Operating Profit 1.1962 Trillion KRW
Home Appliance and Auto Parts Divisions' Combined Operating Profit 776.1 Billion KRW
LG Electronics has achieved operating profits exceeding 1 trillion KRW for two consecutive quarters this year. It is analyzed that the home appliances, which are the core business, and the automotive components business, a pillar of future growth, drove the company's strong overall performance.
On the 25th, LG Electronics announced that it recorded consolidated sales of 21.6944 trillion KRW and operating profit of 1.1962 trillion KRW in the second quarter. Compared to the same period last year, sales increased by 8.5% and operating profit rose by 61.2%. Both sales and operating profit are the highest ever recorded for the second quarter.
In particular, the combined sales of the H&A Business Division, responsible for home appliances, and the VS Business Division, responsible for automotive components, reached 11.5348 trillion KRW in the second quarter, marking the highest sales across all quarters. This represents an 8.2% increase compared to the same period last year. In terms of profitability, both divisions achieved top-level results. Both the H&A and VS Business Divisions recorded their highest-ever operating profits for the second quarter. The combined operating profit of the two divisions in the second quarter was 776.1 billion KRW, a 44.7% increase compared to the same period last year.
Looking at each division, the H&A Business Division posted sales of 8.8429 trillion KRW and operating profit of 694.4 billion KRW in the second quarter. Sales increased by 11% and operating profit by 16% compared to the same period last year. The volume zone strategy, which responded to market polarization by diversifying lineups and price ranges to meet expanding demand in emerging markets such as Latin America and the Middle East & Africa during the second quarter, was effective. The performance of new business areas such as subscriptions and online also contributed to the strong results.
LG Electronics plans to proactively respond to market demand changes in the third quarter while continuing to expand its B2B business, including heating, ventilation, and air conditioning (HVAC) and built-in appliances. Having recently completed the acquisition of smart home platform company Athom, the company will accelerate synergy creation in the home appliance business. It also plans to secure solid profitability based on world-class manufacturing competitiveness.
The VS Business Division recorded sales of 2.6919 trillion KRW and operating profit of 81.7 billion KRW in the second quarter. Sales increased by 1% compared to the same period last year, and operating profit turned positive. Despite a temporary slowdown in electric vehicle market demand in the second quarter, the division continued growth by actively responding to increased demand for premium vehicle infotainment products. Although market uncertainties are expected to continue for the time being, LG Electronics plans to sustain sales growth in the automotive components business by expanding sales of premium new products and safety and convenience devices such as ADAS in line with existing order programs.
The HE Business Division posted sales of 3.6182 trillion KRW and operating profit of 97 billion KRW in the second quarter. Sales rose 15.3% year-on-year, positively influenced by demand recovery in Europe, a key market for OLED TVs. The webOS content and service business also continued rapid growth. Operating profit slightly decreased compared to the same period last year due to cost increases such as LCD panel prices.
The overall TV market demand in the third quarter is expected to show slight growth compared to the same period last year. The recovery in demand for premium products like OLED TVs is expected to outpace the overall TV market. LG Electronics plans to continue efficient business operations by expanding OLED TV sales to minimize cost burdens such as rising LCD panel prices.
The BS Business Division recorded sales of 1.4644 trillion KRW and an operating loss of 5.9 billion KRW in the second quarter. Sales increased by 9.9% year-on-year, driven by expanded sales of strategic products such as LED signage, electronic whiteboards, and gaming monitors. On the profitability side, a slight operating loss was recorded due to cost increases such as LCD panels and ongoing investments in growth businesses like electric vehicle charging and robotics.
Market growth for premium products such as commercial displays and gaming monitors is expected to continue in the third quarter. The BS Business Division plans to continue expanding sales focused on strategic products while concentrating on improving profitability through efficient resource management.
An LG Electronics official explained, "(This performance) is evidence that balanced growth between current core businesses and future businesses is being sustained," adding, "In particular, these businesses are not only achieving external growth but also securing solid profitability, driving qualitative growth based on profitability."
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