LG Electronics sees record second-quarter revenue & profit

LG Electronics has released its financial results for the second quarter of 2024, reporting record revenue and operating profit.

The company achieved consolidated revenue of KRW 21.69 trillion (USD $15.82 billion) and an operating profit of KRW 1.20 trillion (USD $875 million). These figures mark an 8.5 percent year-over-year increase in revenue and a substantial 61.2 percent surge in operating profit, setting new records for the highest second-quarter revenue and operating profit in the company's history.

The primary contributors to this performance were the home appliance and vehicle component sectors. Combined sales from the Home Appliance & Air Solution and Vehicle component Solutions divisions reached KRW 11.53 trillion (USD $8.41 billion), an 8.2 percent increase compared to the previous year. These sectors also reported record-high second-quarter operating profits, totalling KRW 776.1 billion (USD $566.08 million), representing a 45 percent year-over-year increase.

LG's consistent performance in these core areas combined with strategic growth in future-oriented businesses underlines its balanced growth strategy.

The company has been transforming its portfolio, maximising the potential of existing businesses while rapidly advancing high-growth potential ventures. This approach includes leveraging opportunities in the home appliance market through AI infrastructure development and expanding its HVAC business.

The B2B sector has also seen significant growth, driven by the vehicle component business's diversified client base, which includes both electric and internal combustion vehicles despite a temporary slowdown in electric vehicle demand.

Additionally, LG is exploring market opportunities within the AI infrastructure sector and others such as semiconductors and biotechnology through its smart factory business, expected to secure orders worth KRW 300 billion (USD $218.82 million) this year.

In the B2C domain, LG is advancing new business models that merge traditional hardware sales with subscriptions and content services. The webOS content and services business is expanding beyond TVs into IT and infotainment, with expected revenues of over KRW 1 trillion (USD $729.39 million) this year. Subscriptions are also contributing significantly; in June, 36.2 percent of major home appliances sold at LG Brand Shops in Korea were through subscriptions. The Rent-Up subscription model has been launched in Malaysia, offering products like washing machines and refrigerators.

Second-quarter revenue for the Home Appliance & Air Solution Company stood at KRW 8.84 trillion (USD $6.45 billion) with an operating profit of KRW 694.4 billion (USD $506.49 million). Compared to last year, revenue increased by 11 percent and operating profit by 16 percent, marking the highest revenue and operating profit for a second quarter to date. This growth was bolstered by the company's diverse product lineup and strategic adaptations to market demands.

For the Vehicle component Solutions Company, second-quarter revenue was KRW 2.69 trillion (USD $1.96 billion) and operating profit turned positive at KRW 81.7 billion (USD $59.59 million).

The company saw a 1 percent year-over-year increase in revenue and achieved the highest quarterly revenue and second-quarter operating profit ever. This performance was supported by demand for premium in-vehicle infotainment products.

The Home Entertainment Company posted a 15 percent year-over-year increase in second-quarter revenue at KRW 3.62 trillion (USD $2.64 billion). However, operating profit declined to KRW 97 billion (USD $70.75 million) due to increased costs such as rising LCD panel prices. Despite this, premium OLED TVs showed strong demand recovery, particularly in Europe.

Lastly, the Business Solutions Company reported second-quarter revenue of KRW 1.46 trillion (USD $1.06 billion) and an operating loss of KRW 5.9 billion (USD $4.30 million). Revenue increased by 9.9 percent year-over-year, driven by sales of strategic products like LED signage and gaming monitors. However, increased costs and investments in EV charging and robotics affected profitability.

Looking ahead to the third quarter, LG plans to adapt to market shifts while continuing to expand its B2B sectors, particularly HVAC and built-in appliances, ensuring robust profitability through its global manufacturing capabilities. The acquisition of smart home platform company Athom is anticipated to generate further synergies within the home appliance sector.