LG Electronics Q2 profit up on high-end appliances, EV business

July 7, 2023

LG Electronics Inc. said Friday its operating profit for the April-June period likely rose nearly 13 percent from a year earlier on strong performance of premium consumer products and electric vehicle (EV) parts business.

The South Korean tech company estimated its second-quarter operating profit at 892.7 billion won (US$684.2 million), up 12.7 percent from a year earlier.

The profit is the second highest for a second quarter in the company’s history.

Sales rose 2.7 percent to 19.99 trillion won. The data for net income was not available.

The relatively robust earnings results were largely thanks to solid demand for high-end home appliances and electric vehicle parts, as well as stabilizing shipping and material costs.

“Sales of high value-added products of premium brands have been strong amid an economic slowdown,” Park Kang-ho, an analyst at Daishin Securities, said.

“LG’s EV business, in particular, is showing better-than-expected performances and driving the company’s overall growth, as electric vehicles are on the rise and LG diversifies its customer base.”

LG has been working to reduce shipping costs and restructure its business portfolio to “preemptively” deal with slowing demand amid global economic uncertainties.

The company established late last year what it called a “war room” to actively tackle global financial headwinds by removing inefficient working practices and focusing on core businesses, among others.

LG said on Friday such efforts have started paying off.

In the previous quarter, LG’s TV business made a turnaround after logging losses for the past three consecutive quarters, driven by improving TV demand in the European market, LG’s biggest OLED TV market, and decreasing inventory levels and marketing costs.

Its EV business, one of LG Electronics’ future growth drivers, gained ground. LG said the value of orders for its EV parts including in-vehicle infotainment systems and headlamps had reached 80 trillion won in accumulation as of April, amid the explosive growth of electric vehicle.

The company will release its final earnings report later this month.

LG’s shares declined 1.84 percent to close at 123,000 won on the Seoul bourse Friday, underperforming the wider market’s 1.16 percent loss.

LG Electronics Inc.'s logo is seen in a shopping mall in Seoul on May 10, 2023, in this photo provided by the company. (PHOTO NOT FOR SALE) (Yonhap)
LG Electronics Inc.’s logo is seen in a shopping mall in Seoul on May 10, 2023, in this photo provided by the company. (PHOTO NOT FOR SALE) (Yonhap)