Highest Quarterly Sales Ever As Mobile Division Officially Winds Down
LG Electronics Inc. (LG) announced its highest quarterly revenues ever as the company continued to expand its market share for premium home appliances and consumer electronics outside of South Korea. Worldwide consolidated revenues of KRW 17.11 trillion (USD 15.26 billion) rose 48.4 percent from the second quarter a year ago. Second-quarter 2021 operating profit increased 65.5 percent from last year to KRW 1.11 trillion (USD 992.08 million). Results for the LG Mobile Communications Company, which officially winds down at the end of July, are considered discontinued operations and are no longer included in quarterly earnings reports.
The LG Home Appliance & Air Solution Company reported revenues in the second-quarter of KRW 6.81 trillion (USD 6.08 billion), a healthy increase of 32.1 percent from the second quarter a year ago. Operating profit grew 6.8 percent from last year’s second quarter to KRW 653.60 billion (USD 582.75 million), mainly driven by stronger sales in markets outside of South Korea and improved resource management, although costs are expected to increase as raw materials become scarcer while the pandemic-impacted world begins to return to normal. Product competitiveness and operational efficiencies are expected to help LG maintain sales and profit momentum for major appliances in key markets.
The LG Home Entertainment Company grew its revenues to KRW 4.04 trillion (USD 3.60 billion) in the second quarter, a substantial 79.1 percent increase compared to the same period last year. Operating profit soared to KRW 333.50 billion (USD 297.35 million), an increase of 216.4 percent year-on-year thanks to the growing popularity of premium OLED TV products and the recovery of the global TV market, which was negatively affected last year due to retail store shutdowns. With the price of TV panels continuing to rise, LG’s Home Entertainment strategy will center on growing the premium TV segment and nimble inventory management.
The LG Vehicle component Solutions Company achieved second-quarter sales of KRW 1.88 trillion (USD 1.68 billion), a significant increase of 106.5 percent from the same period of 2020 as a result of the recovering automotive sector and increase in demand for electric vehicle (xEV) parts. The company experienced an operating loss of KRW 103.20 billion (USD 92.01 million) as the price of automotive semiconductors increased dramatically during the quarter. Leveraging its expertise in advanced electric vehicle components, LG’s previously announced joint venture with Magna International, a new company called LG Magna e-Powertrain, was officially launched this week.
The LG Business Solutions Company recorded second-quarter revenues of KRW 1.69 trillion (USD 1.50 billion), a solid increase of 28.9 percent from a year ago largely driven by continued strong demand for PCs, monitors and gradual recovery of digital signage and hotel TVs. However, operating profit declined to KRW 61.70 billion (USD 55.01 million) because of higher price of key components such as LCD panels and solar wafers. Second-half plans for profitable growth hinge on continued B2B market recovery, coupled with stabilizing supply of major components and actively reducing costs.
2021 2Q Exchange Rates Explained
LG Electronics’ unaudited quarterly earnings results are based on IFRS (International Financial Reporting Standards) for the three-month period ending June 30, 2021. Amounts in Korean won (KRW) are translated into U.S. dollars (USD) at the average rate of the three-month period of the corresponding quarter — KRW 1,121.58 per USD.
About LG Electronics, Inc.
LG Electronics is a global innovator in technology and consumer electronics with a presence in almost every country and an international workforce of more than 75,000. LG’s four companies – Home Appliance & Air Solution, Home Entertainment, Vehicle component Solutions and Business Solutions – combined for global sales of over USD 56 billion in 2020. LG is a leading manufacturer of consumer and commercial products ranging from TVs, home appliances, air solutions, monitors, service robots, automotive components and its premium LG SIGNATURE and intelligent LG ThinQ brands are familiar names world over.
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