LG ANNOUNCES IMPROVED FOURTH-QUARTER AND FULL-YEAR 2013 FINANCIAL RESULTS
- 2014 01. 27
SEOUL, Jan. 27, 2014 — LG Electronics Inc. (LG) today announced consolidated revenues of KRW 58.14 trillion (USD 53.10 billion) and net profit of KRW 222.70 billion (USD 203.65 million) for full-year 2013, marking an improvement over 2012 results. Operating profits increased modestly in 2013 to KRW 1.28 trillion (USD 1.17 billion) from KRW 1.22 trillion (USD 1.08 billion) in full-year 2012.
Fourth-quarter 2013 consolidated revenues were KRW 14.92 trillion (USD 14.03 billion) with an operating profit of KRW 238.1 billion (USD 223.89 million). Unaudited consolidated financial results for the fourth quarter ending Dec. 31, 2013 showed a net loss of KRW 63.5 billion (USD 60.21 million) primarily due to higher non-operating expense as a result of FX movements.
The LG Home Entertainment Company reported an 18 percent revenue increase quarter-on-quarter to KRW 5.93 trillion (USD 5.58 billion) and full-year operating profit of KRW 404.80 billion (USD 369.86 million). Despite higher demand for LCD TVs in North America, Asia and CIS countries, full-year revenue declined by 5 percent from the previous year. Operating profit margins increased each quarter in 2013 due to a stronger product mix that included more high-end models such as OLED TVs and Ultra HDTVs, which are expected to see strengthening demand in 2014.
The LG Mobile Communications Company reported a 29 percent increase in annual revenues to KRW 12.97 trillion (USD 11.85 billion) year-on-year and an 18 percent increase in fourth-quarter revenues to 3.59 trillion (USD 3.38 billion) quarter-on-quarter with help from stronger LTE smartphone sales such as G2 and Nexus 5. Smartphone shipments of 13.2 million units represented an increase of 54 percent from the previous year. The positive impact of improved product mix was offset by higher marketing investments to strengthen LG’s brand equity and intensified price competition.
The LG Home Appliance Company posted sales of KRW 2.84 trillion (USD 2.67 billion) in the fourth quarter, down 4 percent from the same period the previous year but full-year revenues increased by 5 percent from 2012. Stronger sales in North America and China were offset by slower growth in developing markets such as India, Central and South America. Profitability in the fourth quarter of 2013 improved year-on-year to KRW 83.40 billion (USD 78.08 million) as a result of improved cost structure and stronger sales of products with high profitability. In 2014, demand for LG appliances is expected to increase in developed markets such as North America and Europe as economic conditions continue to improve.
The LG Air Conditioning & Energy Solutions Company reported sales of KRW 719.70 billion (USD 677.33 million) in the fourth quarter of 2013, an increase of 8 percent from the same period in 2012, primarily due to the growth of commercial air-conditioner system sales in overseas markets. For full-year 2013, the company reported revenues of KRW 4.64 trillion (USD 4.24 billion), 8 percent higher year-on-year, and operating profit of KRW 279.50 billion (USD 255.71 million). Demand for commercial air conditioners with high-energy efficiency and inverter-type residential units are expected to help drive further profitability improvements for LG in 2014.
2014 Business Direction
For 2014, LG Electronics is targeting a revenue goal of KRW 62.30 trillion with plans to spend KRW 3 trillion in capital expenditures.
2013 4Q Exchange Rates Explained
All information regarding management performance and financial results of LG Electronics during the fourth quarter of 2013 has been prepared on a consolidated basis in accordance with International Financial Reporting Standards (IFRS). Starting from January 1, 2013, LG Electronics has accounted LG Innotek as a consolidated subsidiary pursuant to the enactment of Korea-International Financial Reporting Standards (K- IFRS) 1001, “Consolidated Financial Statements.” The comparative consolidated financial data are restated accordingly. Amounts in Korean won (KRW) are converted into U.S. dollars (USD) at the average rate of the three month period in each corresponding quarter: KRW 1,063 per USD (2013 4Q) and KRW 1,091 per USD (2012 4Q). Average rate of the twelve-month period in 2013 was KRW 1,095 per USD.
About LG Electronics, Inc.
LG Electronics, Inc. (KSE: 066570.KS) is a global leader and technology innovator in consumer electronics, mobile communications and home appliances, employing 87,000 people working in 113 locations around the world. With 2013 global sales of USD 53.10 billion (KRW 58.14 trillion), LG comprises five business units ― Home Entertainment, Mobile Communications, Home Appliance, Air Conditioning & Energy Solution and Vehicle Components ― and is one of the world’s leading producers of flat panel TVs, mobile devices, air conditioners, washing machines and refrigerators. LG Electronics is a 2013 ENERGY STAR Partner of the Year. For more news and information on LG Electronics, please visit www.LGnewsroom.com.