LG Electronics posted an increase in profit in the third quarter of this year, but the company warned that this was effectively a reduction in weak demand caused by the global economic slowdown.
The South Korean electronics maker’s operating profit rose 25.1% year-on-year to 746.6 billion won. However, last year’s third-quarter operating profit was already low, reflecting General Motors’ 480 billion won for the recall. LG Electronics supplies the insulators used in batteries by LG Energy Solutions, which the US giant uses for its electric vehicles.
For LG Electronics, this means that third-quarter operating profit should be seen as a decline due to the global economic slowdown.
Profits from the sale of consumer goods such as home appliances and televisions have fallen significantly as inflation has reduced consumer spending due to higher commodity prices and logistics costs during the pandemic.
LG Electronics’ home appliance business unit posted an operating profit of 228.3 billion won, a significant decline from last year, which it attributed to marketing and logistics costs. The TV business unit posted an operating loss of 55.4 billion won due to weak TV demand, affecting other TV makers such as Samsung. The loss was steeper than last quarter’s 18.9 billion won, the first operating loss in years.
However, the South Korean electronics maker noted that revenue rose 14.1% year-over-year, the highest quarterly revenue in the company’s history. The company explained that this was due to increased sales of high-end home appliances and auto parts.
LG Electronics’ auto parts business unit also posted an operating profit of 96.1 billion won and revenue of 2.3 trillion won, up 45.6% from __ a year ago. LG Electronics said automakers are showing strong demand for parts, and the company has responded proactively.