LG Electronics Records Impressive Q1 earnings for the Financial Year of 2008
Sales Jumped to Record High Levels Reaching a Total of USD 11.747 Billion
LG Electronics (LGE), world-leading leading provider of consumer electronics and mobile communications, announced un-audited consolidated earnings results for the three month period ending March 31, 2008.
Throughout this time period and in comparison with corresponding figures from the same time period last year global sales and operational profits soared to the company’s record-high level. This rise is attributed to stable operations from all business divisions coming in parallel with robust sales earning generated from handsets and plasma display units. Sales throughout this time period jumped 16.9% to reach a total of USD 11.747 billion. For the same time interval operating, profits were recorded to be USD 634 million, which translates into a profit margin of 5.4%, a figure which is 5.1% higher than the corresponding figure recorded for the previous year.
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On a parent basis, first-quarter sales rose by 14.8% to reach a total of USD 7.253 million. This percentage was calculated in comparison to corresponding figures from the same time period last year. Operating profit booked at USD 591 \million with the profit margin of 8.1%, when during the same time period last year these figures were recorded to be USD 184 million with a 2.9% margin. Net Profits were posted at USD 442 million. This figure presented itself as a successful recovery when compared to last year’s loss of USD 131 million. This recovery is attributed to equity method gains from earnings from the company’s subsidiaries overseas and from higher investment in LG Display
Business performances on a global basis by division were recorded as follows;
the Mobile Communication Company posted record-high sales of USD 3.484 billion which in turn translated into a 32.6% rise when compared to corresponding first quarter results from 2007. From the handset business alone, sales reached USD 3.346 billion thus indicating that they are 35.7% higher than figures recorded a year earlier. Shipment of handsets recorded the highest in unit sales, reaching a total of 24.4 million units. This figure is generated from high demands and strong sales of “Viewty”, “Voyager”, “Venus” and other flagship models. Shipment to emerging markets including Asia, China and Middle East region increased by 36% on quarter and WCDMA sales in US, Korea shipments increased 18% on quarter. Operating profit margin improved to 13.7% with a 13.9% increase in handset division earning alone due to growth in demand on premium models paralleled increased productivity.
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Outlook for a quarter ahead continues bright in mobile handset unit sales. Various hit products and new line-ups including the third model in ‘Black Label’ series with design competitiveness and unique UIs, touch-screen and internet accessibility are expected to lead to a growth in shipments that is 20% higher than that recorded for this quarter.
Digital Appliance Company sales increased by 3.6% to reach a total of USD 2.910 billion on year and a resulting 4.7% operating margin Despite decreases in the US market contraction from sub-prime effect, the company sales in other regions including Korea, Asia, Europe and Middle East regions lead overall increase. Sight decline in profitability was also recorded during this time period due to higher raw material prices. Entering high season of air conditioners, sales and profitability in the coming quarter is expected to remain bright.
Digital Display Company sales jumped 32.1% to reach a total of USD 3.808 billion. This rise was powered by rise in sales of flat TVs and monitors; LCD TV sales rose by 82%, Plasma TVs rose by 18% and monitors sales rose by 33% from a year earlier. PDP module sales grew 17% on year thanks to the company’s demand in plasma TVs and 32-inch line-ups to the company and other vendors. Operating profit successfully recovered to USD 8.4 million.
Last but not least, Digital Media Company operating profit and margin increased to USD 18 million and 1.3% due to cost innovations in PC business.
Commenting on these results General manager of the LGE Amman Branch, Mr. Kevin Cha said, “The financial year ending December 31st 2007 witnessed the unveiling of a number of flagship products, each presenting a lasting impact
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not only on its division or category but on the global market at large. Viewty, Healthcare products, PG60 and LG60 demonstrate this fact perfectly, for although they are varied in their utilitarian aspects; they all embody a successful marriage between exquisite aesthetic features and cutting-edge technology. LGE’s products are designed to embrace the user’s experience and needs. In terms of our customers’ satisfactions, I think the impressive sales figures witnessed in all our divisions speak for themselves. I on my part am confident that these results serve to prelude a successful ear to come, and I attribute this success to our ability to combine practicality and innovation in all our market offerings”
