South Korean electronics giant LG is putting on its best face after its bottom line plunged by two thirds.
LG said that the drop in currencies was the main reason its net income for the first quarter of 2015, ended March 31 [PDF], stood at 38bn Korean Won (US$35m) compared to 98bn (US$91.5m) from the year-ago period – a 61 per cent drop. Sequentially, sales were down 8.4 per cent.
"Operating profit margins declined quarter-on-quarter due to weaker currency movements in emerging markets such as Russia and Brazil and weaker revenue due to seasonality," the company explained in trying to brush off the dive.
- Home entertainment sales fell five per cent from 4.66tr Won to 4.44tr Won on the year ago quarter.
- Home Appliances sales were down two per cent, from 4.13tr Won to 4.06tr Won.
- Vehicle Components logged 380bn Won in sales, up 33 per cent from last year. The unit made a 24tr Won loss due to R&D spending.
- Mobile communications recorded 3.6tr Won in sales, up 5 per cent from last year's 3.42tr Won total.
Earlier this month, LG Display reported its own 16 per cent drop in revenues to 7tr Won from 8.3tr. Profit was 744bn Won up from 94bn a year ago. That massive leap was "mainly due to favorable market trends for large-sized TV panels based on stable demand continuing from the fourth quarter of 2014," the biz said in a statement.
"In addition, the company’s continuous cost reduction efforts contributed to the results."
LG hopes to get a boost from the release of the G4 handset. The Android 5.1 smartphone will hit the market in the US over the next few months, and will sport a Snapdragon 808 processor and a 5.5in screen.
The Korean electronics giant also expects the onset of summer to improve air conditioner sales, while the investment in developing new car technologies is being banked on by the vehicle components division to pay off in the coming months. ®