LG Electronics’ fourth-quarter operating profit falls 53.3 percent

LG Electronics Inc.South Korea’s leading appliance manufacturer, announced this Wednesday, January 8, a significant drop in its operating profits during the fourth quarter of 2024. The company attributed this drop to persistent global economic uncertainty. According to a report filed with regulators, the company’s operating profits decreased 53.3 percent compared to the same period a year earlier.

For the period from October to December 2024, LG Electronics estimated operating profits of 146.1 billion won (100.7 million dollars), compared to 312.5 billion won (214.7 million dollars) recorded in 2023.

In contrast, sales reached 22.77 trillion won (US$15.645 billion), representing a slight increase of 0.2 percent year-on-year. However, data on net income was not disclosed in the preliminary report.

Despite the challenges in the fourth quarter, the company’s annual performance reflects a mixed trend. LG Electronics estimated that its operating profits for all of 2024 fell 6.1 percent compared to 2023, totaling 3.43 trillion won ($2.357 billion).

On the other hand, annual sales reached a historical record of 87.74 trillion won (US$60.286 billion), representing an increase of 6.7 percent year-on-year.

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As mentioned above, the company attributed the decline in its operating profits to several adverse factors. These include increased shipping costs, as well as extraordinary costs associated with inventory consolidation efforts. While these measures have been necessary to adapt to market conditions and optimize resource management, they have had a significant impact on profitability.

Despite these challenges, LG Electronics’ flagship home appliance business continued to show strong performance and this unit is expected to record annual sales exceeding 30 trillion won for the second consecutive year.

The broader technology sector has faced significant headwinds in 2024. Key issues include rising interest rates, inflation, and fluctuations in consumer demand.