Press Release

10/19/2005

LG Electronics Third Quarter Sales at KRW 6,018 billion

- 3Q sales total KRW 6,018 billion (export: KRW 4,565 billion, domestic sales KRW 1,454 billion), with operating profit of KRW 280 billion and Net profit of KRW 157 billion.

- 3Q sales total KRW 6,018 billion (export: KRW 4,565 billion, domestic sales KRW 1,454 billion), with operating profit of KRW 280 billion and Net profit of KRW 157 billion.
- Overall sales decreased 1.5% year-on-year due to the appreciation in Korean Won, but strong growth and improved profitability in Handsets and Digital Display business has led to rise in quarter-on-quarter sales by 7.2% and 4.7 % operating profit.
- Mobile handsets shipment increased 31% year-on-year to 15.5 million units and recorded 5.4% operating profit.
- Digital Display Company sales geared by PDP/LCD TV sets and module caused increase in sales by 13%.

Seoul, October 18, 2005 -- On October 18, 2005, Mr. Young Soo Kwon, Chief Financial Officer of LG Electronics, announced the third quarter earnings at the LG Twin Tower.

Total sales reached KRW 6,018 billion (export: KRW 4,565 billion, domestic sales KRW 1,454 billion), down 1.5% year-on-year and up 7.2% quarter-on-quarter. Operating profit reached 4.7% to KRW 280 billion and net profit and recurring profit recorded 2.6% to KRW 157 billion and 2.1% to KRW 128 billion.

Overall sales decreased year-on-year due to the appreciation in Korean Won, but quarter-on-quarter sales increased geared by growth in handset and display products. Operating profit year-on-year declined, but quarter-on-quarter in all four business divisions were profitable and increased 94.5 % due to improved profitability in handset and display products.

Sales from Digital Appliance Company declined 6% year-on-year to KRW 1,324 billion (domestic KRW 575 billion, export KRW 749 billion), but operating profit increased 17.7 % year-on-year to KRW 90 billion. Domestic sales were up 8% year-on-year to KRW 575 billion due to strong sales of air conditioners and refrigerators. Exports decreased by 15% year-on-year to KRW 749 billion due to the appreciation in Korean Won and transfer of low-end product manufacturing to overseas production facilities. Strong sales of premium products such as TROMM washing machines, commercial air conditioners and DIOS 3-door refrigerators grew in North America and developed market.

Sales from Digital Display Company increased by 13% year-on-year to KRW 1,319 billion (domestic KRW 300 billion, export KRW 1,019 billion). Domestic sales were up 48% due to strong demand in PDP/LCD TVs, while exports increased 19% in USD terms and 6% after the conversion to Korean Won. Sales of digital TVs increased 11% year-on-year, with PDP TVs rising 54% and LCD TVs by 267%. The total shipment of PDP module units grew by 140% to 482 thousand. Operating profit increased 19.5% year-on-year to KRW 28 billion.

Sales from Digital Media Company fell by 18% year-on-year but up 6.5% quarter-on-quarter to KRW 780 billion (domestic KRW 176 billion, export KRW 604 billion). Domestic sales rose 53% year-on-year due to strong notebook PC sales, while overseas exports were down 28% year-on-year due to the appreciation in Korean Won, ASP decline and transfer of production facilities overseas. Optical storage sales decreased 32% year-on-year, but quarter-on-quarter sales remained steady. Also, AV sales were down 8% year-on-year, but quarter-on-quarter sales increased by 4%. In PCs, sales increased 8% year-on-year and 4% quarter-on-quarter. Overseas sales decreased 33% due to a reduction in the NTPC OEM business. Operating profit was up by 93.3% year-on-year and 33.5% quarter-on-quarter.

Sales from Mobile Communication Company increased to KRW 2,545 billion (domestic KRW 363 billion, export KRW 2,182 billion) with 5.0% operating profit to KRW 128 billion, while handsets sales was KRW 2,293 billon with 5.4% operating profit to KRW 123 billion. CDMA domestic sales declined 19% year-on-year, but increased quarter-on-quarter due to new product launches, while overseas sales increased 44% year-on-year due to reinforced marketing in the North American market and strong sales in India. Also, GSM sales to European operators and in emerging markets increased. WCDMA sales slowed due to strong competition in the 3G market. Total shipments increased by 31% year-on-year and 28% quarter-on-quarter to 15.5 million units.

In regards to business direction, LG Electronics plans to focus on capturing developed markets with its premium brand products, strengthening cost competitiveness through cost innovation and reinforcing R&D efficiency and design.

In regards to business direction, LG Electronics plans to focus on capturing developed markets with its premium brand products, strengthening cost competitiveness through cost innovation and reinforcing R&D efficiency and design.
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