LG Electronics recorded third-quarter revenue of 23.8241 trillion won and operating profit of 781.9 billion won. Revenue rose 8.9% year on year, while operating profit increased 13.5%. The results reflected strong performance in the business-to-business (B2B) and subscription businesses that LG Electronics is developing as future growth businesses. Third-quarter B2B revenue rose 8.6% year on year to 6.1 trillion won, while subscription revenue, including products and services, increased 3.4% to 760 billion won. The performance suggests that differentiated product and service competitiveness is producing tangible results in B2B and subscriptions. Within B2B, the artificial intelligence (AI) data center cooling solutions business delivered particularly notable results. Cumulative data center cooling solution orders exceeded 3 trillion won through the third quarter, increasing fivefold from about 600 billion won in the first half. This would reflect expanded supplies of chillers and coolant distribution units (CDUs), which are essential for controlling data center heat. Data center cooling solution orders are expected to begin contributing substantially to revenue next year, following a period of 7 to 9 months after orders are received.
The home appliance business, the HS division, recorded third-quarter revenue of 7.0444 trillion won and operating profit of 259.2 billion won. Revenue increased year on year as sales of premium and mid- to low-priced products expanded, but operating profit fell nearly 30% because of higher logistics and marketing costs. LG Electronics expects a limited recovery in appliance demand in the fourth quarter. It therefore plans to pursue sales growth focused on Global South markets, including India and Brazil, where demand is relatively resilient, to restore profitability. The TV business, the MS division, posted third-quarter revenue of 5.0215 trillion won and operating profit of 146.8 billion won. After recording a loss exceeding 300 billion won in the third quarter last year, it returned to profitability with high-value-added premium products, including organic light-emitting diode (OLED) TVs. Despite weaker consumer sentiment toward TVs and rising cost pressures, LG Electronics plans to strengthen the business's structural competitiveness through a strategy centered on premium TVs.
The vehicle components business, the VS division, posted revenue of 2.8261 trillion won and operating profit of 190.3 billion won, setting third-quarter records. This reflected growth in the in-vehicle infotainment (IVI) business. LG Electronics is pursuing more efficient operations by improving cost competitiveness and seeking to maximize profitability based on its existing order backlog. The heating, ventilation, and air conditioning business, the ES division, recorded third-quarter revenue of 2.1736 trillion won and operating profit of 87.2 billion won. Although profitability declined because of increased investment to secure more orders for future new businesses, the company plans to accelerate growth, particularly in data center cooling solutions. LG Electronics expects logistics and raw material cost pressures to continue in the fourth quarter. It expressed concern that an intensifying war in the Middle East could delay the stabilization of logistics costs beyond previous expectations, and forecast that display prices would remain firm to slightly higher in the fourth quarter because of rising manufacturing costs and panel makers' production cuts. An LG Electronics representative said, “In the fourth quarter, we will continue pursuing growth strategies in B2B, subscriptions, and online businesses, while responding effectively to external conditions by diversifying our supply chain and improving operational efficiency.”
Original Korean article: ETNews
English brief by Korea Wind Intelligence, koreawindintel.com
