LG Electronics Exceeds 1Q Expectations Amidst Global Contraction

LG Electronics (LG), a leader in consumer electronics and mobile communications, announced unaudited consolidated earnings results of the three-month period ending March 31, 2009. Amounts in Korean Won (KRW) are translated into US Dollars (USD) at the average rate of the three month period in each corresponding quarter: KRW 1,409 per USD (2009 1Q), KRW 1,362 per USD (2008 4Q, QoQ), KRW 955 per USD (2008 1Q, YoY).

Sales and Profit In the first quarter of 2009, sales on a global basis including LG’s overseas subsidiaries soared 14.6% to KRW 12.85 trillion (USD 9.12 billion) year-on-year. Operating profit saw KRW 456 billion (USD 324 million) resulting in a margin of 3.5%, 2.8% point higher than the previous quarter. On a parent basis, the company recorded sales of KRW 7.07 trillion (USD 5.02 billion), an operating profit of KRW 437 billion (USD 310 million). Consolidated sales including affiliates rose 10.7% to KRW 15.89 trillion (USD 11.28 billion) with operating profit of KRW 117 billion (USD 83 million), for a margin of 0.7%, 1.5% point higher than a year earlier.

-The Home Entertainment Company sales rose 18.6% to KRW 4.30 trillion (USD 3.05 billion) and returned a profit of KRW 14 billion (USD 10 million) due to robust flat panel TV sales, especially LCD TVs, even during low season. Shipments rose 40% YoY to 3,538,000 units. The company expects global demand in 2Q to be higher as demand for small flat panel TVs grows in emerging markets and developed markets look to purchase second units.

- The Business Solutions Company reported sales declining 6.6% YoY to KRW 1.10 trillion (USD 0.78 billion) with operating profit recording KRW 27 billion (USD 19 million). Demand withdrawal impact from global recession led to sales decline in monitors, commercial TVs for hotels and automotive products. The company will focus on improving sales from new B2B channels targeting products including network monitors and Pro:centric Solution hotel TVs.

Financial Statement and Non-operating Items on a Parent Basis
The company recorded a recurring profit loss of KRW 144 billion (USD 102 million) and net profit loss of KRW 198 billion (USD 141 million) primarily as a result of foreign exchange loss of KRW 316 billion (USD 224 million) and equity method loss of KRW 211 billion (USD 150 million) from overseas subsidiaries and affiliates. LG Display, in which LG Electronics has a 37.9% stake, booked an equity method loss of KRW 90 billion (USD 64 million).

Source: LG Electronics