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Photo = Yonhap news |
[Alpha Biz= Kim Jisun] LG Electronics' Q4 Operating Profit Halves Due to Increased Logistics Costs and Intensifying Competition with Chinese Firms, but Annual Revenue Hits Record High
According to LG Electronics' preliminary results for 2024 released on Wednesday, the company's fourth-quarter revenue for last year reached 22.7775 trillion KRW, while its operating profit was 1.461 trillion KRW. This represents a 53.3% decrease in operating profit compared to Q4 of 2023 (3.125 trillion KRW), falling significantly short of the analysts' consensus estimate of around 2.5 trillion KRW.
LG Electronics cited several factors contributing to the decline in operating profit. These include the sharp rise in global maritime freight costs and one-time expenses related to inventory management in the second half of last year. Increased competition with Chinese companies and higher marketing expenses also negatively impacted the profitability of its TV segment.
Despite the weaker fourth-quarter performance, LG Electronics achieved record-breaking annual revenue of 87.7442 trillion KRW, surpassing its previous all-time high of 82.5215 trillion KRW in 2022. In terms of business segments, the home appliance division is expected to have surpassed 30 trillion KRW in revenue for the second consecutive year. The automotive components division, despite facing a slowdown in electric vehicle demand, is estimated to have exceeded 10 trillion KRW in annual revenue for the second year in a row.
For this year, LG Electronics plans to focus on qualitative growth by restructuring its business portfolio.
Alphabiz Reporter Kim Jisun(stockmk2020@alphabiz.co.kr)
