LG Electronics is expected to report sales of over 3 trillion won in the first quarter of this year from its heating, ventilation, and air conditioning (HVAC) business, which it is nurturing as a new growth engine, marking a solid performance in the first quarter since the establishment of its separate business division.
According to the industry on the 13th, the ES division, responsible for the HVAC business, is expected to record a double-digit operating profit margin in the first quarter, the highest among LG Electronics' four business divisions.
Domestic securities firms analyzed that the ES division's first quarter sales would exceed 3 trillion won (DAISHIN SECURITIES 3 trillion 1040 billion won, iM Securities 3 trillion 1000 billion won, Korea Investment & Securities 3 trillion 731 billion won, Hana Securities 3 trillion 562 billion won). The operating profit is estimated to be around 350 billion won.
Previously, LG Electronics separated the HVAC business from the existing Home Appliance & Air Solutions (H&A) division and established the ES division through an organizational restructuring at the end of last year.
According to the interim results announced by LG Electronics on the 7th, along with its first quarter results, the ES division recorded annual sales of 8 trillion 8211 billion won and an operating profit of 675.3 billion won (operating profit margin of 7.7%) last year.
While its sales were the lowest among the four divisions, its operating profit was the second highest, following that of the Home Appliance division. It had the highest operating profit margin.
Jo Ju-wan, the CEO of LG Electronics, noted at a shareholder meeting on the 25th of last month that "we have a vision to grow our currently 10 trillion won-sized air conditioning business into a 20 trillion won-sized business by 2030."
The HVAC business is gaining attention as global corporations are making infrastructure investments in AI backend industries such as data centers or semiconductor factories amid the AI boom. CEO Jo also agreed to provide LG Electronics' cooling solutions for Microsoft's data centers during a recent meeting with Satya Nadella, the CEO of Microsoft.