The LG Twin Towers in Yeouido, Seoul (LG Electronics)
LG Electronics, a leading home appliance supplier, said Thursday it has achieved the highest second-quarter revenue in company history at 19.9 trillion won ($15.6 billion), overcoming the sluggish demand situation the world’s consumer appliance market is experiencing.
Backed with overall growth in its business portfolios, especially automotive parts and electric vehicles, LG said it will expand investment and build new manufacturing facilities overseas.
In a regulatory filing, the tech giant said its consolidated revenue stood at 19.9 trillion won in the April-June period this year. Operating profit was recorded at 741.9 billion, declining by 6.3 percent on-year. The downturn was due primarily to a one-time second-quarter provision this year, the company said.
The record revenue reflects the company’s moves to fundamentally improve its business structure by pursuing new platform-based service businesses and continuously expanding its business-to-business segments, LG said.
LG said its home appliance and air solutions business recorded strong profitability to achieve 7.9 trillion won in sales and an operating profit of 600.1 billion won, which increased by 40 percent on-year. The growth is backed by efficient cost structure management and increased sales of high-demand products such as air conditioners and energy-efficient heat pump-enabled products, LG said.
The home appliance giant said it will be launching the new LG ThinQ UP 2.0 home appliances with enhanced connectivity and new subscription services to offer a hyper-personalized user experience in the third quarter this year.
LG also said its TV business was able to maintain its sales at 3.1 trillion won, with an operating profit of 123.6 billion won in the second quarter. The company said it focused on improving operational efficiency and improving profitability, concentrating resources to nurture its content and service businesses based on its webOS smart TV platform.
Aligning with the company’s goal to connect its products with services to enhance customer experience, the company also intends to transform the TV business portfolio into a media and entertainment service provider, the company said.
LG’s Vehicle component Solutions business achieved the highest second-quarter revenues in company history, with the growth driven as the company is experiencing economies of scale from sales expansion, the company said.
As a steady increase of EV demand is expected in the future, LG said it will actively seek new opportunities in future mobility areas, such as autonomous driving, software solutions and content.
“LG currently secures an order backlog worth about 80 trillion won, and we expect the number to reach 100 trillion won by the end of this year,” LG said during the earnings call for Q2.
“By product, infotainment systems takes 60 percent of the order backlog, and the rest are on EV parts and headlamps.”
As for its EV charger business, the company said it will be introducing new products from the third quarter of this year. It aims to tap into the North American market in 2024.
The company said its automotive parts division also plans to invest in expanding its manufacturing facilities overseas. For instance, it is currently building a manufacturing headquarters in Mexico to handle the North American market, and it also plans to make more investments to expand existing facilities in Vietnam and Poland.
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