LG Electronics expects to post a meaningful annual profit in its TV business this year. It plans to offset cost pressures from higher raw material prices, including memory, in the second half through price management, product specification optimization, and expense efficiencies.
On July 30, at the earnings conference call for the second quarter of this year, Park Sang-ho, executive vice president and head of management for the Media & Entertainment Solutions (MS) Business Unit at LG Electronics, said, "In the first half, the share of premium products increased and price management improved, and overseas business performance, particularly in the Americas, improved from a year earlier."
Park said, "Through continuous cost-reduction efforts and stable fixed-cost management, operating profit improved significantly from a year earlier, and operating margin reached the mid-single-digit range."
For the second half, the prolonged Middle East war and rising raw material prices are expected to pressure profitability. Park said, "We expect cost burdens to increase due to higher prices of raw materials such as memory components," adding, "We will further refine price management and minimize the impact of rising memory prices by securing strategic inventory and optimizing product specifications."
He added, "We will continue expense efficiency efforts to reduce the impact on the bottom line," and said, "For the full year, we expect a significant year-over-year improvement in profit and loss and a meaningful level of profit."
LG Electronics plans to grow both its premium TV and webOS platform businesses over the mid to long term. Park said, "We will strengthen our premium leadership through differentiated product lineups and research and development (R&D) investments in future core technologies," adding, "We will drive growth of the webOS platform business by expanding global partnerships and an artificial intelligence (AI) and data-based ecosystem." He added, "We will maintain a stable profit trend even in a highly volatile market environment."