LG Electronics Inc. (LG) today announced first-quarter 2021 consolidated sales of SAR 63.38 billion (USD 16.90 billion) and operating profit of SAR 5.1 billion (USD 1.36 billion) – the highest quarterly results in the company’s history with the 8.1 percent operating profit being a first-quarter record. Compared with the first quarter a year ago, revenues grew by 27.7 percent and profitability soared by 39.1 percent, reflecting a very strong demand for LG home appliances and home entertainment products as consumers around the world continue to spend more time at home.
The LG Home Appliance & Air Solution Company generated first-quarter sales of SAR 22.61 billion (USD 6.03 billion), an increase of 23.8 percent from the previous year. Operating profit of SAR 3 billion (USD 826.39 million) was 22.1 percent higher than the first quarter last year. For the second consecutive quarter, the appliance business division saw significant growth year-on-year in North America and Europe as well as in its home market of South Korea where the rental business is particularly healthy. Profitability was accompanied by stable growth led by strong sales of premium products in North America and Europe. The business unit expects to see continued growth by expanding overseas sales in new products.
The LG Home Entertainment Company recorded sales of SAR 13.50 billion (USD 3.60 billion) in the first quarter, an increase of 34.9 percent from the same period a year ago. Operating income grew 23.9 percent year-on-year to SAR 1.36 billion (USD 362.75 million), buoyed by strong sales in North America and Europe. Premium products led by OLED and NanoCell TVs continued to experience strong demand as the pandemic effect continued in most of the world. To maintain this success in 2021, LG will continue to enhance its premium product lineup, further expand online sales, optimize resources, and streamline asset management.
The LG Mobile Communications Company reported sales of SAR 3.36 billion (USD 897.18 million) in the first quarter with an operating loss of SAR 943.71 million (USD 251.63 million). Operating loss declined 28 percent from the same quarter a year ago, due to the lack of new products in light of the recent public announcement that LG will exit the smartphone business at the end of July. Profit and loss for discontinued operations – including a breakdown of continuing and discontinued operations – will be included in the second quarter results.
The LG Vehicle Component Solutions Company achieved first-quarter sales of SAR 6.38 billion (USD 1.70 billion), an increase of 43.5 percent from the same period last year. Operating loss narrowed to SAR 2.36 million (USD 629,000), which can be attributed to the recovery of the automotive sector in North America and Europe as well as increased revenues from new projects in the e-Powertrain and infotainment sectors and better cost management.
The LG Business Solutions Company saw improved first-quarter revenues of SAR 6.26 billion (USD 1.67 billion), an increase of 9.1 percent from a year ago and 23.6 percent higher than the previous quarter largely on the back of strong demand for products such as monitors and PC products in the era of remote working and online learning. Operating profit of SAR 451.47 million (USD 120.38 million) declined from the same quarter last year due to the increasing cost of components such as LCD panels and semiconductors.
2021 1Q Exchange Rates Explained
LG Electronics’ unaudited quarterly earnings results are based on IFRS (International Financial Reporting Standards) for the three-month period ending March 31, 2021. The original amounts in Korean won (KRW) have been translated into U.S. dollars (USD) at the average rate of the three-month period of the corresponding quarter — KRW 1,113.16 per USD. The Saudi riyal (SAR) is pegged at 3.75 to the US dollar (USD).
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