▲ LG Electronics' headquarters in Yeouido, Seoul
LG Electronics has posted an operating profit approaching 800 billion won in the third quarter of this year, showing a performance improvement of over 10% compared to the same period last year.
This result comes as core businesses such as home appliances and TVs maintained solid growth despite challenging external environments, joined by new businesses including robotics and artificial intelligence (AI) data center cooling solutions.
LG Electronics announced in a regulatory filing today (the 28th) that its preliminary consolidated operating profit for the third quarter reached 781.9 billion won, a 13.5% increase from the same period last year.
Revenue rose 8.9% year-on-year to 23.8241 trillion won.
For the first three quarters of this year, cumulative revenue reached 71.3778 trillion won and operating profit hit 4.0347 trillion won, up 9.2% and 55.9%, respectively, compared to the same period last year.
This marks the first time that cumulative revenue has surpassed 70 trillion won and operating profit has exceeded 4 trillion won by the third quarter.
LG Electronics explained that despite unfavorable external conditions such as the conflict in the Middle East, its core businesses drove growth based on solid market positioning and differentiated product competitiveness.
Revenue from subscription businesses, including home appliances and services, grew 8.6% year-on-year to 760 billion won, supported by continued overseas expansion.
Business-to-business (B2B) revenue also increased by 3.4% to 6.1 trillion won.
However, the operating profit fell 19.9% short of the market consensus of 975.8 billion won compiled by Yonhap Infomax.
This is interpreted as being affected by sluggish profitability at its consolidated subsidiary, LG Innotek, due to the sharp drop in exchange rates.
LG Electronics maintained a black-ink operational trend across all business divisions in the third quarter of this year.
The HS Business Company, responsible for home appliance operations, posted revenue of 7.0444 trillion won and an operating profit of 259.2 billion won.
Revenue exceeded 7 trillion won for the second consecutive quarter.
Despite short-term increases in logistics and marketing costs, stable profitability was maintained through operational efficiency, and a two-track strategy encompassing premium and volume zones proved effective, LG Electronics explained.
While demand recovery is expected to be limited in the fourth quarter, which is a traditional off-season for home appliances, the company plans to focus on the Global South, where demand is relatively solid, to expand sales.
The MS Business Company, which handles the TV business, recorded revenue of 5.0215 trillion won and an operating profit of 146.7 billion won.
Both revenue and operating profit showed significant improvements compared to the same period last year (revenue of 4.6525 trillion won and an operating loss of 302.6 billion won).
Increased sales of premium products such as OLEDs and expansion into emerging markets drove the performance turnaround.
For the fourth quarter, LG Electronics projected that TV demand would decline compared to the same period last year due to consumer sentiment dampening from high oil prices and high interest rates, amid continuing cost pressures for memory chips and panels.
In response, the company plans to continue expanding sales of premium products and strengthen the structural competitiveness of its business.
The VS Business Company, in charge of the vehicle components business, posted revenue of 2.8261 trillion won and an operating profit of 190.3 billion won.
Both revenue and operating profit hit record highs for a third quarter.
The conversion of order backlogs into revenue and the growth of the in-vehicle infotainment (IVI) business continued, while robust profitability was maintained through operational efficiency.
Although the recovery of finished car demand in the fourth quarter is expected to be limited, the company plans to sustain revenue growth based on its order backlog while focusing on operational efficiency, such as strengthening cost competitiveness.
The ES Business Company, responsible for the HVAC (heating, ventilation, and air conditioning) business, recorded revenue of 2.1736 trillion won and an operating profit of 87.2 billion won.
While sales increased primarily centered on overseas commercial air conditioning markets, profitability partially declined due to increased costs to cope with expanding future new business orders.
LG Electronics is translating the competitiveness of its core home appliance business into securing future growth engines and materializing new businesses, such as AI data center (AIDC) cooling solutions and robotics.
Cumulative orders for the AIDC cooling solution business surpassed 3 trillion won in the third quarter.
This marks a more than fivefold surge in just one quarter from the 600 billion won level seen in the first half.
LG Electronics is also investing an additional 220 billion won to expand domestic and overseas production capacities, including securing production bases within the United States.
In the robotics business, which represents physical AI, the nation's largest data factory has entered partial operation.
The AI home solution business will pursue the establishment of an ecosystem based on the latest Internet of Things (IoT) technologies in collaboration with global big tech companies.
In the fourth quarter, LG Electronics plans to respond to external environmental shifts by pursuing growth strategies in B2B, subscriptions, and online channels, while diversifying supply chains and enhancing operational efficiency.
The 730,000 treasury shares acquired within the year will be entirely retired in the fourth quarter as planned.
(Photo: Yonhap News)
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