LG ELECTRONICS REPORTS SECOND QUARTER 2008 EARNINGS RESULTS
Seoul, July 21, 2008 - LG Electronics (LG), a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three month period ended June 30, 2008. Amount in Korean Won (KRW) are translated into US dollars (USD) at the average rate of three month period in each quarter, which was KRW 1,016 per USD (2008 2Q), KRW 955 per USD (2008 1Q, QoQ), KRW 929 per USD (2007 2Q, YoY).
Sales and Profit
LG continued replacing its record-high quarterly sales and operating profit on both global and parent basis, thanks to stable operations from all business divisions, mainly from robust sales in handsets and flat panel TVs.
On a global basis, sales jumped 22.1% to KRW 12.735 trillion (USD 12.534 billion) and operating profit recorded KRW 856 billion (USD 843 million), which makes the profit margin at 6.7%. On a parent basis, second-quarter sales rose 22.5% to KRW 7.234 trillion (USD 7.120 billion). Operating profit booked KRW 635 billion (USD 625 million) with the profit margin of 8.8%. The company posted strong net profits of KRW 707 billion (USD 696 million), as equity method gains from earnings of its subsidiaries in overseas and investment in LG Display (NYSE: LPL, KRX: 034220).
Business performances on a global basis by division are as follows;
Mobile Communications Company posted the company’s another record-high sales of KRW 3.849 trillion (USD 3.788 billion), 34.3% up from the second quarter 2007. From handset business, the sales reached KRW 3.754 trillion (USD 3.695 billion), 38.6% up from a year earlier. Operating profit margin improved to 13.9%, 14.4% in handset division due to growth in high-end models and improvements in operational efficiency. Shipment of handsets also recorded the highest in unit sales as well, a total of 27.7 million mainly from North America (33%) and emerging markets including Middle East Asia, CIS and Central & South America, thanks to strong sales of “Secret”, “Viewty”, “Venus” and other premium phones. Secret is the third model in its Black Label Series, with highly stylish design and enriched technological features including the slimmest 5 megapixel camera and innovative materials.
Digital Appliance Company sales increased 4.9% to KRW 3.781 trillion (USD 3.721 billion) on year and operating margin resulted in 7.2% despite challenging business environment such as higher raw material prices, economic slowdown and US market contraction from sub-prime effect.
Digital Display Company sales jumped 37.2% to KRW 3.742 trillion (USD 3.683 billion) powered by rise in sales of flat TVs; LCD TVs 86%, Plasma TVs 31% from a year earlier. PDP module sales grew 22%. Following profitability turnaround in the previous quarter, operating profit in the second quarter successfully remained profitable at KRW 38.0 billion (USD 37.4 million).
Sales from Digital Media Company reduced 2.1% on year to KRW 1.220 trillion (USD 1.201 billion) due to low seasonality, but operating profit and margin increased to KRW 13.0 billion (USD 12.8 million) and 1.0% by strong effort for cost innovation.
About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, home appliances and mobile communications, employing more than 82,000 people working in over 110 operations including 81 subsidiaries around the world. With 2007 global sales of USD 44 billion, LG is comprised of four business units - Mobile Communications, Digital Appliance, Digital Display and Digital Media. LG is the world’s leading producer of mobile handsets, flat panel TVs, air conditioners, front-loading washing machines, optical storage products, DVD players and home theater systems. For more information, please visit www.lg.com.
Earnings Conference and Conference Call
LG Electronics will hold a Korean language earnings conference on July 21, 2008, at 4:00 p.m. Korea Standard Time at the LG Twin Tower Auditorium (East Tower, B1) in 20 Yoido-dong, Yeongdeungpo-gu, Seoul, Korea. An English language conference call will follow on July 22, 2008, at 10:00 a.m. Korea Standard Time, 2:00 a.m. GMT and July 21, 9:00 p.m. EDT. The call-in number is +82-2-6677-3356 and the pass code is 5577. Corresponding slides will be available at the Investor Relations section of the LG Electronics web site: http://www.lg.com/ir/archive/main.jhtml.
For those who are unable to participate in the call, a replay will be available for 30 days after the call. The call-in number is +82-2-6677-3358 and the pass code is 185469.