LG Electronics Inc. announced a strong year with 2020 revenues of KRW 63.26 trillion ($56.45 billion) and record-setting operating profit of KRW 3.20 trillion ($2.85 billion), an increase of 31.1 percent over 2019, driven primarily by higher sales of premium home appliances and OLED TVs as well as strong growth in vehicle component solutions.
Sales in the fourth quarter of KRW 18.78 trillion ($16.76 billion) grew 16.9 percent from the same period of 2019 and were 11 percent higher than the previous quarter. Despite the impact of COVID-19, the quarter’s operating profit of KRW 650.20 billion ($580.19 million) increased significantly by 539 percent compared to the fourth quarter of 2019.
While COVID-19 and slow economic recovery remain concerns for 2021, LG expects the global economy to normalize under the sound fiscal policies of world governments and the successful implementation of vaccinations. In 2021, core technologies such as AI, 5G, IoT, and mobility will be widely applied to various LG business areas.
The LG Home Appliance & Air Solution Company ended another healthy year with record 2020 revenues of KRW 22.27 trillion ($19.87 billion), an increase of 3.5 percent increase from the previous year, and operating profit of KRW 2.35 trillion ($2.10 billion), another record. Results reflect increased sales of new appliance categories and the home appliance rental business in South Korea. Fourth-quarter revenue of KRW 5.54 trillion ($4.94 billion) was the highest fourth quarter in the company’s history, an increase of 20 percent year-on-year with double digit growth in South Korea, North America and Europe.
The LG Home Entertainment Company reported 2020 revenues of KRW 13.18 trillion ($11.76 billion) and operating profit of KRW 969.70 billion ($865.29 million), a 22.9 percent increase over the previous year. Sales in the quarter of KRW 4.28 trillion ($3.82 billion) were 7.9 percent higher than the fourth quarter of 2019 and up 16.7 percent from the previous quarter. Quarterly operating profit of KRW 204.50 billion ($182.48 million) reflected increased sales in North America and Europe.
The LG Business Solutions Company achieved 2020 revenues of KRW 6.01 trillion ($5.36 billion) with an operating profit of KRW 457.88 billion ($408.51 million) due to demand growth for IT products related to remote working and online learning. Fourth-quarter sales of KRW 1.51 trillion ($1.35 billion) were 4.8 percent higher than the same period of 2019, while quarterly operating profit was KRW 70.30 billion ($62.73 million), lower than the previous year due higher prices for major components and global logistic costs. The market for information displays is expected to improve as global demand recovers while demand for IT products continues to grow. The company’s solar module business is expected to improve with increased demand for renewable energy in major developed markets.
2020 4Q Exchange Rates Explained
LG Electronics’ unaudited quarterly earnings results are based on IFRS (International Financial Reporting Standards) for the three-month period ending December 31, 2020. Amounts in Korean won (KRW) are translated into U.S. dollars (USD) at the average rate of the three-month period of the corresponding quarter — KRW 1,120.66 per USD.
