LG Display was able to break market’s expectation and avoided making operating deficit in first quarter. Although it was able to make surplus for 16 quarters in a row, its operating profit decreased by 95% compared to first quarter of last year.
LG Display (CEO (Vice-Chairman) Han Sang-bum) made an announcement on the 27th that it made $5.20 billion (5.9892 trillion KRW) and $34.3 million (39.5 billion KRW) in sales and operating profit respectively in first quarter. It was able to save its money by making surplus for 16 quarters in a row since second quarter of 2012.
Although its net profit, which was $1.04 million (1.2 billion KRW), was converted to surplus compared to previous quarter, it converted to deficit compared to first quarter of last year.
LG Display explained that it was able to make operating profit even in the midst of difficult market environments such as oversupply of LCDs and reduction of unit cost of panels by having its operation based thoroughly on profitability.
LG Display decreased percentage of panels for TVs that are smaller than 30 inches, which had huge range of reduction in price due to oversupply, and increased percentage of panels for 40-inch TVs and large TVs that are bigger than 60 inches. It increased its profitability by increasing percentages of premium products such as M+, UHD and others.
One of things that LG Display did to maximize efficiency in production of all of its businesses was converting production capacity of IT products that had low profitability for TVs.
Percentages of sales in first quarter based on products were TV panels (38%), panels for tablet PCs and laptops (24%), panels for mobile devices (23%), and panels for monitors (15%).
LG Display is planning to actively respond to large demands in second quarter by also putting out M+ and others and maximize profitability by increasing percentages of premium products such as UHD, HDR and others. It is also planning to increase efficiency in production by continuously improving its processes.
“I expect overall stability in second quarter as amount of shipment based on area of a panel will increase by single digit of percentage compared to previous quarter and as selling price will start to decrease less due to local events and increased shipment of new products.” said CFO Kim Sang-don of LG Display.
Staff Reporter Bae, Okjin | withok@etnews.com