Solid Performance in Home Appliance and Home
Entertainment Helps Offset Difficult Quarter in Mobile Phones
Karachi, July 26, 2012 – LG Electronics (LG) reported a 46 percent
increase in net profits for the second quarter of 2012 versus the same period a
year ago. Despite the continuing recessionary conditions, LG’s operating profit in the
most recent quarter increased significantly year-over-year.
Stronger performance in home entertainment and home appliances
compared to the second
quarter last year helped offset profit
declines in LG’s mobile business.
Due to a combination of
more premium products, strategic focus on developing markets and aggressive
cost reductions, second-quarter net profit increased 46 percent year-over-year
to KRW 159 billion (USD 138.02 million) while operating profit more than
doubled
to KRW 349 billion (USD 302.95 million) from the same period last year. Revenues, while 5.2
percent higher than in the first quarter, declined from last year’s second
quarter by 10.6 percent to KRW 12.86 trillion (USD 11.16 billion) due to declining
feature phone sales and weak demand for IT products.
LG Home Entertainment
Company posted
significantly improved operating profit in the quarter compared to the same
period in 2011. Due in large part to an increase in sales of
more premium products and improved supply chain management, operating profit more
than doubled to 216 billion (USD 187.5 million) year-over-year. Sales declined 5.8 percent from the same period
a year ago to KRW 5.48 trillion (USD 4.76 billion) but increased 2.8 percent from
the first quarter of 2012. LG’s popular CINEMA
3D TVs will continue to drive sales in the second half as it pushes ahead to
become the top global seller in the 3D segment.
LG Mobile Communications Company, after a positive first quarter, struggled somewhat
in the most recent quarter with an operating loss of KRW 57 billion (USD 49.48 million) mainly
due to greater marketing expenses related to new model launches in the quarter.
Overall revenues declined 28.5 percent year-over-year to KRW 2.32 trillion (USD 2.01 billion) as a result of shrinking
feature phone sales but smartphone shipments rose
to 44 percent of unit sales, up from 36 percent the previous quarter capitalizing
on LG’s strength in LTE phones. The company is planning to introduce new
LTE models in the second half in developed 4G regions including North America
and parts of Europe and Asia.
LG Home Appliance Company saw its second-quarter 2012 operating profit nearly triple to KRW 165
billion (USD 143.23 million) from the same period last year thanks
to a better product mix and improved cost efficiency. Revenues also increased
year-over-year to KRW 2.88 trillion (USD 2.50 billion) from growth in developing
markets. The company still expects improved results in the second half compared
to the previous year despite ongoing weak demand in developed markets.
LG Air Conditioning and Energy Solution Company posted operating profit of KRW 70 billion (USD 60.76 million),
a 17 percent increase year-over-year. Revenues increased 21 percent
quarter-to-quarter but declined year-over-year to KRW 1.47 trillion (USD 1.28
billion) due to weak residential conditioner sales in Korea and low demand in developed
markets. However, profitability improved year-over-year led by higher
contribution from system air conditioner sales. The company will focus on improving
profitability by introducing more energy-efficient products and by accelerating growth
in its commercial air conditioner systems business.
2012 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, 2012. Amounts in Korean Won (KRW) are translated into US
Dollars (USD) at the average rate of the three month period in each
corresponding quarter: KRW 1,152 per USD
(2012 2Q) and KRW
1,084 per USD (2011 2Q).
# # #
About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and
technology innovator in consumer electronics, mobile communications and home
appliances. With 117 operations around the world, LG achieved global sales of
USD 49 billion (KRW 54.26 trillion) in 2011. LG comprises four business units –
Home Entertainment, Mobile Communications, Home Appliance, and Air Conditioning
& Energy Solution – and is one of the world’s leading producers of flat
panel TVs, mobile devices, air conditioners, washing machines and
refrigerators. LG Electronics is a 2012 ENERGY STAR® Partner of the
Year. For more news and information on LG Electronics, please visit
www.LGnewsroom.com.
Media
Contacts:
Mustafa
M. Hussain or Khurram Zia 02135837674
0333-2146768
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