▲ An appliance section inside a large supermarket
The performance scorecards of Samsung Electronics and LG Electronics in their home appliance businesses have shown a stark divergence this year.
LG Electronics achieved an operating profit exceeding 1 trillion won for two consecutive quarters.
In contrast, Samsung Electronics turned to a deficit, widening the operating profit gap between the two sides to around 1 trillion won.
According to the industry, the combined sales of LG Electronics' home appliance and TV divisions for the second quarter were tallied at 14.9164 trillion won.
Operating profit came in at 1.1411 trillion won.
Previously in the first quarter, the company posted sales of 14.9348 trillion won and an operating profit of 1.19 trillion won.
Despite the market slump, it has firmly maintained the 1 trillion won-level profit for two straight quarters.
Unlike this, sales for Samsung Electronics' home appliance and TV business units hovered around 14.5 trillion won in the second quarter.
Although the scale grew larger than the previous first quarter, operating profit turned to a deficit of 10 billion won.
The sales scales themselves for the related divisions of both companies were similar in the first half of this year.
However, the profit gap jumped significantly from 990 billion won in the first quarter to 1.15 trillion won in the second quarter.
Analyses suggest that while both companies faced the same adverse factors of sluggish consumption and rising logistics costs, their business structures and fundamentals divided their performances.
The difference appears particularly prominent in the home appliances sector, which incurs high fixed costs.
An industry insider pointed out that the more demand slows down, the more important factory operation rates and cost competitiveness become.
The insider added, "The more difficult the market environment, the more clearly the effects of business structure and fundamental improvements are reflected."
Currently, Samsung Electronics is focusing on restructuring low-profitability businesses and reorganizing its production bases.
Recently, it also withdrew from some home appliance and TV businesses in China.
The company maintains that while total sales increased through the sales of premium products, profitability worsened due to rising component prices.
In contrast, LG Electronics rapidly reorganized its portfolio centered around profitable businesses.
It explained that growth in business-to-business (B2B) and subscription businesses supported this performance.
In fact, LG Electronics' second-quarter B2B sales reached 6.5 trillion won, a 5% increase compared to the same period last year.
Subscription business sales also rose concurrently, reaching 660 billion won.
In addition, the artificial intelligence data center (AIDC) cooling solution sector secured over 600 billion won in orders in the first half alone.
Even the TV business, which suffered massive deficits last year, turned a profit this year, boosting the upward trend in performance.
(Photo: Yonhap News)
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