LG Electronics has announced its consolidated revenue of 21.7 trillion KRW and operating profit of 1.1961 trillion KRW for the second quarter of 2024.
Both revenue and operating profit surpassed market expectations, setting a record for the highest quarterly results in the company’s history. Operating profit increased by an impressive 61.2% compared to the same period last year, marking the first time it exceeded 1 trillion KRW in Q2. Revenue also rose by 8.5% year-on-year.
When comparing the first half of the year, including the previous quarter, revenue increased by 5.9% and operating profit rose by 13% compared to the same period last year. LG Electronics’ revenue for the first half of the year has exceeded 40 trillion KRW for three consecutive years, while operating profit has surpassed 2 trillion KRW for four consecutive years.
This second quarter showed a balanced quality growth in both core and future growth businesses.
The home appliance sector has continued to showcase outstanding growth compared to industry peers. The air conditioning business, which experienced a seasonal peak in Q2, significantly contributed to the results. Notably, sales of the Whisen Stand Air Conditioner equipped with AI in June surged by over 80% year-on-year.
The automotive components business has expanded its share of premium product sales while introducing LG AlphaWare Solutions, responding proactively to automakers’ transition to Software-Defined Vehicles (SDVs) in future technology fields.
The home entertainment division has experienced increased production costs, particularly concerning LCD panels, but premium OLED TV sales in advanced markets like Europe have shown signs of gradual recovery. Efficient operations continue, and the webOS content/service business has been enhancing its contribution to performance.
The business solutions sector has targeted the market with premium IT products such as the on-device AI laptop ‘LG Gram’ and the world’s first variable resolution and refresh rate gaming monitor. The sector has applied AI to commercial displays and is accelerating efforts in edutech markets with tailored customer experience products like electronic whiteboards. The company continues to pursue early electrification in promising new areas, such as robotics and EV charging.
The strong performance can be attributed to the efforts made towards transforming the business structure and operational methods to a more future-oriented approach. This transformation not only maximizes the potential of existing businesses but also leads to the discovery of future growth drivers and reinvestment for additional growth.
The B2B sector has been steadily growing and driving changes in the business structure. Especially as AI emerges as a pivot in the industry, the Heating, Ventilation, and Air Conditioning (HVAC) business, led by chillers, is opening up additional growth opportunities in the AI infrastructure’s supporting industries, promising positive prospects ahead.
Despite a temporary slowdown in electric vehicle demand, the automotive components business maintains stable growth based on a balanced portfolio that includes vehicle infotainment, electric vehicle drive components, and automotive lighting, alongside securing ongoing orders.
The B2C sector is exploring new business models that enable continuous revenue generation, such as subscription services that combine low initial purchase burdens with various products ranging from small to large appliances. Additionally, leveraging millions of products sold globally as platforms for content/services is becoming a driving force for overcoming market uncertainties and growth limits.
LG Electronics plans to accelerate its customer-centric business model changes. Having recently completed the acquisition of smart home platform company Athom, LG will now push forward with changes from a personalization and service perspective in the home appliance business, following the TV sector. Particularly, the appliance division is speeding up its transition to a space solution-centric business paradigm and expanding ‘Empathy Intelligence Appliances’ that consider and resonate with customers’ needs.
webOS’s flagship content, ‘LG Channels,’ which offers over 3,500 channels for free in 28 countries worldwide, has exceeded 50 million users. LG Electronics is expanding its webOS content/service business from TV to IT and vehicle infotainment.
The announced provisional results are based on the Korean International Financial Reporting Standards (K-IFRS). LG Electronics plans to present its Q2 consolidated net profit and performance by each business unit at the earnings presentation scheduled for the end of this month.
By Lee Sang-jin daedusj@autodiary.kr