LGD Records Deficit in 2Q, but Confident in Expanding OLED Business Performance in Second Half

[Financial News] LG Display recorded an operating loss of 116 billion won in the second quarter of this year, turning back to a deficit after recording a profit for two consecutive quarters following the fourth quarter of last year. However, on a cumulative basis for the first half, the deficit was reduced compared to the same period last year, and from the second half, the company plans to accelerate its 'annual profit' through business sophistication centered on organic light-emitting diode (OLED) panels. 
LG Display announced on the 24th that it recorded consolidated sales of 5.587 trillion won and an operating loss of 116 billion won in the second quarter of this year. Compared to the same period last year, sales decreased by 16.7%, and the deficit expanded. In particular, operating profit, which had been in deficit for three consecutive years, turned to profit for two consecutive quarters in the fourth quarter of last year and the first quarter of this year, but returned to a deficit again. 
The second quarter is a traditional off-season before the launch of new products by major customers such as Apple in the second half, resulting in a decrease in mobile shipments compared to the previous quarter. The strategy of business structure sophistication centered on OLED, the end of the liquid crystal display (LCD) TV business, and the decline in the won-dollar exchange rate also affected the performance.
Looking at the entire first half, there was some improvement compared to the first half of last year. The performance for the first half of this year was sales of 11.6523 trillion won and an operating loss of 826 billion won, which is a 3% decrease in sales compared to the first half of last year (sales of 11.9612 trillion won, operating loss of 5.631 trillion won), but the operating profit improved by 4.805 trillion won. The business structure sophistication centered on OLED, cost structure improvement, and operational efficiency are leading to results, and the trend toward an annual performance turnaround continues. In addition, net income for the period turned to a profit of 8.908 trillion won, reflecting foreign exchange gains and losses due to exchange rate fluctuations and other gains such as the sale of shares in the Guangzhou LCD plant.
Kim Seong-hyun, Chief Financial Officer (CFO), said at the earnings conference call that day, "At the beginning of the year, we said we would definitely achieve an annual profit this year, and if we evaluate only the first half, we achieved better results than expected," adding, "We expect a steep rebound in performance as achievements expand across large and small OLEDs in the second half." 
LG Display plans to focus more on high-value-added products such as OLED. In fact, the proportion of OLED products in total sales in the second quarter of this year increased by 4 percentage points (p) to 56% compared to the same period last year. Accordingly, LG Display plans to invest 1.26 trillion won in OLED alone by 2027. Kim CFO said, "This investment is a strategic investment to continuously maintain the technological gap with competitors in OLED," adding, "Currently, the financial aspects have improved significantly, and the performance will also improve, so this investment will not be a burden on the finances at all." soup@fnnews.com Im Subin Reporter