LG Announces 2020 Financial Results with Record-Breaking Profit

Anjie lou delos Reyes
With 2020 revenues of KRW 63.26 trillion (USD 56.45 billion) and a record operating profit of KRW 3.20 trillion (USD 2.85 billion), LG Electronics Inc. (LG) reported a strong year, a rise of 31.1 percent over 2019, powered mainly by higher sales of premium home appliances and OLED TVs as well as strong growth in vehicle component solutions.

LG Announces 2020 Financial Results with Record Breaking Profit
LG Announces 2020 Financial Results with Record-Breaking Profit

KRW 18.78 trillion (USD 16.76 billion) revenues in the fourth quarter rose 16.9 percent from the same time in 2019 and were 11 percent higher than the previous quarter. Despite the effects of COVID-19, KRW 650.20 billion (USD 580.19 million) operating profit for the quarter improved dramatically by 539 percent compared to the fourth quarter of 2019.

Although COVID-19 and the sluggish economic recovery remain a concern for 2021, under world governments' sound fiscal policies and the efficient implementation of vaccinations, LG expects the global economy to normalize. Core technologies such as AI, 5G, IoT, and connectivity will be broadly applied to different LG market areas in 2021.

Also Read: LG UltraGear™ Monitors Offer Immersive Gaming Experience

With record 2020 sales of KRW 22.27 trillion (USD 19.87 billion), a rise of 3.5 percent from the previous year, and operating profit of KRW 2.35 trillion (USD 2.10 billion), another record, the LG Home Appliance & Air Solution Business ended another healthy year. The results reflect increased sales of new types of appliances and South Korea's home appliance rental market. KRW 5.54 trillion (US$ 4.94 billion) fourth-quarter revenue was the highest fourth quarter in the history of the group, a rise of 20 percent year-on-year with double-digit growth in South Korea, North America, and Europe.

Revenues of KRW 13.18 trillion (USD 11.76 billion) and operating profit of KRW 969.70 billion (USD 865.29 million) was posted by the LG Home Entertainment Firm in 2020, a 22.9 percent raise over the previous year. KRW 4.28 trillion (USD 3.82 billion) revenues in the quarter were 7.9 percent higher than the fourth quarter of 2019 and up 16.7 percent from the previous quarter. The KRW 204.50 billion (USD 182.48 million) quarterly operating profit reflected increased revenue in North America and Europe.

Due to the increase in demand for IT products related to remote working and online learning, the LG Business Solutions Company generated sales of KRW 6.01 trillion (USD 5.36 billion) in 2020 with an operating profit of KRW 457.88 billion (USD 408.51 million) KRW 1.51 trillion (USD 1.35 billion) fourth-quarter revenues were 4.8 percent higher than the same time in 2019, while KRW 70.30 billion (USD 62.73 million) quarterly operating profit was lower than the previous year due to higher prices for major components and global logistics costs. As global demand recovers and demand for IT products continues to rise, the market for information displays is anticipated to improve. With an increased demand for renewable energy in major developed markets, its solar module business is expected to improve.

2020 Clarified 4Q Exchange Rates

For the three-month period ending December 31, 2020, LG Electronics' unaudited quarterly earnings results are based on IFRS (International Financial Reporting Standards). Korean won (KRW) amounts are converted into U.S. dollars (USD) at the average rate of KRW 1,120.66 per USD for the corresponding quarter's three-month duration.

LG Announces Second Quarter 2020 Financial Results (8/24/20)

Despite some setbacks due to the consequences of the coronavirus pandemic, in its financial results for the second quarter of 2020, South Korean technology giant LG Electronics Inc. expressed optimism driven by its mobile communications department's growth.

LG's Mobile Communications Company recorded USD 1.07 billion in second-quarter sales of KRW 1.31 trillion, increasing 31.1 percent from its first-quarter revenues. LG is optimistic that the launch of its new, promising smartphone models will bring sales, momentum, and profitability to the company, including the LG Velvet rollout in the third quarter of the year.

On the other hand, the company's overall financial results for the second quarter of 2020 recorded a decrease of 17.9 percent compared to last year's figures, with a consolidated revenue of KRW 12.83 trillion or USD 10.51 billion. The operating profit of LG also dropped by 24.1 percent from the operating income of last year's second quarter.

See Also: LG Introduces AI-Powered LSAA LED Series

The weakened global demand in the midst of the pandemic also resulted in a 15.5 percent drop in LG's Home Appliance and Air Solution Company revenues. The second quarter reported revenues of KRW 15.6 trillion of USD 4.22 billion. Even though the operating profit margin of 12.2 percent was the highest second quarter in the history of the LG H&A Company, operating income of KRW 628 billion (USD 514.23 million) decreased 12.5 percent year-on-year. Despite this, as customers take an interest in healthier living, LG is looking into a positive trend.

The company's Home Entertainment Company, Vehicle Component Solutions Company, and Business Solutions Company have also experienced slowdowns. Still, LG claims that measures have been taken, and its business strategy has been refocused on optimizing operating efficiencies to bring profitability and creating more business opportunities.

LG aims to cement its presence in the telecommuting and distance learning markets in its business solutions department.

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