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LG Reports Improved Annual Sales, Profitability

1/27/2014 04:27:00 AM Eastern

Seoul, South Korea ― LG Electronics reported higher revenues, as well as higher net and operating profits in its fiscal year, ended Dec. 31, 2013.

LG reported consolidated revenues of 58.14 trillion Korean won (KRW) ($53.1 billion) for the year compared with 55.12 trillion KRW for 2012.

Net profit was of 222.7 billion KRW ($203.65 million) for full-year 2013, marking an improvement over 2012 results from 102.8 billion KRW, LG said.

Operating profits increased modestly in 2013 to 1.28 trillion KRW ($1.17 billion), from 1.22 trillion KRW ($1.08 billion) in full-year 2012.

Fourth-quarter 2013 consolidated revenues were 14.92 trillion KRW ($14.03 billion) compared with the prior year’s Q4 performance of 14.8 trillion KRW.

Operating profit for the quarter was 238.1 billion KRW ($223.89 million) compared with the prior year’s KRW 116.9 billion.

But LG reported a net loss in Q4 of 63.5 billion KRW ($60.21 million) primarily due to higher non-operating expense as a result of FX movements. It was a reduced net loss compared with the prior year’s 478.2 billion KRW net loss.

LG Home Entertainment Company reported an 18 percent revenue increase quarter o -quarter to 5.93 trillion KRW ($5.58 billion) and full-year operating profit of 404.8 billion KRW ($369.86 million).

Despite higher demand for LCD TVs in North America, Asia and CIS countries, full-year revenue declined by 5 percent from the previous year. Operating profit margins increased each quarter in 2013 due to a stronger product mix that included more high-end models such as OLED TVs and Ultra HD TVs, which are expected to see strengthening demand in 2014.

LG Mobile Communications Company reported a 29 percent increase in annual revenues to 12.97 trillion KRW ($11.85 billion) year on year and an 18 percent increase in fourth-quarter revenues to 3.59 trillion KRW ($3.38 billion) quarter on quarter with help from stronger LTE smartphone sales, such as the G2 and Nexus 5. Smartphone shipments of 13.2 million units represented an increase of 54 percent from the previous year.

LG said the positive impact of improved product mix was offset by higher marketing investments to strengthen LG’s brand equity and intensified price competition.

Finally LG Home Appliance Company posted sales of 2.84 trillion KRW ($2.67 billion) in the fourth quarter, down 4 percent from the same period the previous year, but full-year revenues increased by 5 percent from 2012. Stronger sales in North America and China were offset by slower growth in developing markets such as India, Central and South America, the company said.

Profitability in the fourth quarter of 2013 improved year on year to 83.4 billion KRW ($78.08 million) as a result of improved cost structure and stronger sales of products with high profitability. In 2014, demand for LG appliances is expected to increase in developed markets such as North America and Europe as economic conditions continue to improve.

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