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LG Registers Record-Breaking Profit for 2020 Despite COVID-19 Crisis

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Image courtesy LG

LG Electronics announced a strong year with 2020 revenues of KES 6.2 trillion and record-setting operating profit of KES 313 billion, an increase of 31.1% over 2019, driven primarily by higher sales of premium home appliances and OLED TVs as well as strong growth in vehicle component solutions.

COVID-19

Sales in the fourth quarter of 2020 of KES 1.8 trillion represented an increase of 16.9% compared to the same period in 2019 and were 11% higher than the previous quarter.

Despite the impact of COVID-19, the quarter’s operating profit of KES 63 billion increased significantly by 539% compared to the fourth quarter of 2019.

While COVID-19 and slow economic recovery remain concerns for 2021, LG expects the global economy to normalize as countries pursue sound fiscal policies and vaccine rollout to tame infections.  

 LG Home 

In 2021, core technologies such as AI, 5G, IoT and mobility will be widely applied to various LG business areas to drive growth.

The LG Home Appliance & Air Solution Company ended another healthy year with record 2020 revenues of KES 1.9 trillion, an increase of 3.5% from the previous year, and a record operating profit of KES 231 billion.

The latest results reflect increased sales of new appliance categories and the home appliance rental business in South Korea. Fourth-quarter revenue of KES 543 billion was the highest fourth-quarter in the company’s history, an increase of 20 per cent year-on-year with double-digit growth in South Korea, North America and Europe.

The LG Home Entertainment Company reported 2020 revenues of KES 1.2 trillion and operating profit of KES 95 billion, a 22.9 per cent increase over the previous year. Sales in the quarter of Kshs. 420.4 billion were 7.9 per cent higher than the fourth quarter of 2019 and up 16.7% from the previous quarter. Quarterly operating profit of KES 20 billion reflected increased sales in North America and Europe.

 LG Mobile 

The LG Mobile Communications Company announced full-year 2020 revenues of KES 512.6 billion. Fourth-quarter sales of KES 136.4 billion were 4.9 per cent higher than the same quarter of 2019 but 9.2 per cent lower than the previous quarter due to shortages of 4G chipsets and sluggish sales of premium smartphones in overseas markets.

The full-year operating loss for LG Mobile Communications Company totalled KES 82.5 billion, reflecting increased marketing investments to support flagship devices, partially offset by fixed cost reductions due to manufacturing efficiencies.

LG Vehicle

The LG Vehicle Component Solutions Company reported sales in 2020 of KES 569.8 billion, growth of 6.1 per cent over 2019. Revenues in the fourth quarter of KES 188 billion were 41.3 per cent higher than the same quarter the previous year driven in large part by the recovery of demand in key automotive markets including North America and Europe and higher sales from new projects.

The modest fourth-quarter operating loss of KES. 195.8 billion improved year-on-year and quarter-on-quarter due to sales increases aligned with the recovery of market demand in the second half, as well as improved cost management.

The LG Business Solutions Company achieved 2020 revenues of KES 589 billion with an operating profit of KES 44.8 billion due to demand growth for IT products related to remote working and online learning. Fourth-quarter sales of KES 148.5 billion were 4.8 per cent higher than the same period of 2019, while quarterly operating profit was KES 6.9 billion, lower than the previous year due to higher prices for major components and global logistic costs.

 

The market for information displays is expected to improve as global demand recovers while demand for IT products continues to grow. The company’s solar module business is expected to improve with increased demand for renewable energy in major developed markets.

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