LG Electronics Inc. (LG) announced its highest-ever second-quarter revenues, reflecting strong sales for LG home appliances in key regions and the profitable growth of LG’s vehicle components business as the global automotive industry rebounds.
LG reported revenues of KRW 19.5 trillion in the second quarter of 2022, 15 percent higher than the same quarter the previous year. Operating profit for the second quarter was KRW 792.2 billion, 12 percent lower than the same quarter last year, largely due to supply chain challenges and higher logistics costs.
Given the business impact of the evolving state of the pandemic and economic conditions, LG is leveraging its comprehensive business portfolio, expanding sales from premium to mass-tier products and growing business-to-business areas such as auto parts.
The LG Home Appliance & Air Solution Company reported revenues of KRW 8.07 trillion in the second-quarter, first time in LG’s history for a single business unit to exceed quarterly revenues of KRW 8 trillion. Operating profit was KRW 432.2 billion. Revenues increased 18 percent from the second quarter a year ago, mainly driven by stronger sales of premium appliances and new categories such as hygiene products using steam technology in the key regions of North America and Latin America. The business unit plans to continue its momentum by improving competitiveness of premium products and strengthening its mass-tier lineup.
The LG Home Entertainment Company recorded revenues to KRW 3.46 trillion in the second quarter with operating loss of KRW 18.9 billion reflecting increased marketing investments in response to intensified market conditions. LG’s Home Entertainment strategy will center on effectively managing marketing expenses and growing the premium TV segment, particularly around peak selling seasons including the FIFA World Cup and holiday.
The LG Vehicle component Solutions Company achieved second-quarter sales of KRW 2.03 trillion, a 19 percent increase from the same period of 2021, leading the business unit to be profitable for the first-time. The significantly higher sales were driven by LG proactively responding to higher demand from automakers with efficient supply chain management. With the cloud of uncertainty created by inflation and geopolitical risks, the company will continue to build strong relationships with global automakers along with strong cost structure management to further improve profitability.
The LG Business Solutions Company recorded solid second-quarter revenues of KRW 1.54 trillion with operating profit of KRW 14.3 billion. Revenues increased 19 percent from a year ago largely on the back of recovery of the business-to-business segment. The company plans to aggressively target the rebounding B2B segment by developing more customized solutions and expanding its product portfolio for stable growth.
Discontinued Operations: Second-quarter financial results from LG’s solar panel business, which closed in June as previously announced, are being treated as a loss from discontinued operations.