According to an LG Electronics announcement, the company’s gross profit in the latest quarter fell 91% year-on-year due to lower global household electricity demand.
Specifically, the leading South Korean electronics group posted a gross profit of 69.3 billion won ($56.1 million) in the final quarter of 2022. Gross profit fell 90.7% year-on-year. 2021.
It was the first time since the fourth quarter of 2018 that the country’s second-largest appliance maker posted a gross profit of less than 100 billion won.
Due to the unfavorable macroeconomic situation and high financing costs, LG recorded a net loss of 212.4 billion won in the fourth quarter of 2022 and a profit of 21.3 billion won in the same period. billion won. Still, LG’s quarterly revenue hit a new record of 21.85 billion won, up 5.2 percent year-on-year.
Explaining the poor business performance, LG said it was due to the absence of Covid-19, which led to increased demand for home appliances during social distancing. Combined with many macroeconomic factors, the purchasing power of users will drop significantly by the end of 2022.
For the full year 2022, LG’s gross profit was 3.55 billion won, down from 4.05 billion won in 2021.
Revenue from auto parts solutions accounted for more than 10% of the company’s sales last year. The unit turned profitable in 2021 for the first time since its establishment in 2013, with operating income of 169.6 billion won.
Despite the unfavorable operating environment this year, LG still intends to focus on finding new growth drivers through a premium strategy and expanding high-margin, high-priced orders. High value-added.
LG officials stated that it will take quite a long time for user demand to recover. The company will maintain the business structure to maintain profits and cut costs.