LG Electronics reported a rise in profits in the third quarter of this year, but the company warned that this was down to weak demand caused by the global economic slowdown.
The South Korean electronics maker said its operating profit rose 25.1 percent year-on-year to 746.6 billion won. However, last year’s third-quarter operating profit was already low, reflecting the 480 billion won it had to shoulder for the cost of General Motor’s withdrawal. LG Electronics supplies the separators used in the LG Energy Solution batteries used by the American giant in its electric vehicles.
LG Electronics said this meant its third-quarter operating profit should be considered a decline caused by the global economic slowdown.
Its profitability from sales of its consumer products, such as home appliances and televisions, has fallen significantly compared to the high it enjoyed during the pandemic due to rising raw material prices and logistics costs, while inflation had decreased consumer spending.
LG Electronics’ home appliances business unit contributed 228.3 billion won in operating profit, a significant drop from last year that it attributed to marketing and logistics costs. Its TV business unit posted an operating loss of 55.4 billion won on weak TV demand that is also affecting other TV makers such as Samsung. The loss is steeper than the previous quarter when it posted its first operating loss in years at 18.9 billion won.
However, revenue rose 14.1% from a year ago and was the highest quarterly revenue in the company’s history, the South Korean electronics maker said. This was thanks to increased sales of its premium home appliances and auto parts, the company explained.
LG Electronics’ vehicle components business unit also reported operating profit of 96.1 billion won and revenue of 2.3 trillion won __, up 45.6% from a year ago. Automakers were showing increased demand for parts, and the company proactively responded to that, LG Electronics said.