Seoul– LG Electronics said on Thursday that its fourth-quarter deficit widened due to losses in its equity ties with a display-making affiliate, while its mobile business remained in the red.
The tech giant said it logged a net loss of $717 million in the October-December period, compared with a 80.7 billion won net loss a year earlier, Yonhap news agency reported.
The company’s operating profit increased 34.5 per cent on-year to 101.8 billion won in the fourth quarter, but this was an 87 per cent drop compared to the previous quarter. Sales rose 1.8 per cent on-year to 16 trillion won in the last three months of 2019.
For the whole of 2019, LG Electronics’ net income tumbled 87.8 per cent on-year to 179.9 billion won.
Operating profit dropped 9.9 per cent on-year to 2.4 trillion won, but sales inched up 1.6 per cent on-year to a record 62.3 trillion won.
LG Electronics said its equity ties with LG Display Co. hurt its bottom line. The company holds a 37.9 per cent stake in the world’s leading OLED panel maker.
LG Display, which is scheduled to announce its fourth-quarter earnings on Friday, has been suffering from falling LCD panel prices.
Analysts here expect LG Display to suffer more than 1 trillion won in losses in 2019.
Aside from equity losses, LG Electronics saw its mobile business extend a slump to 19 consecutive quarterly losses.
LG Electronics’ mobile business unit posted 332.2 billion won in operating loss in the fourth quarter, widening from a loss of 318.5 billion won a year earlier. The unit’s sales plunged 21.2 per cent on-year to 1.3 trillion won.
For all of 2019, its mobile business had sales of 5.9 trillion won, down from 7.9 trillion won in 2018, while operating loss was tallied at 1.01 trillion won, also widening from 789 billion won in 2018.
Analysts here predict that LG Electronics shipped only 29 million smartphones in 2019, down 28 per cent from a year earlier.
“Sluggish sales of mass-tier smartphones in overseas markets, increased marketing expenses and retail inventory adjustments led to operating loss in the mobile business,” the company said. (IANS)
