South Korea's LG Electronics Inc. said it expected its sales of home appliances to grow by 10 to15 percent in 2005, down from an earlier target of 20 percent, due to a stronger won and higher steel prices.
Lee Young-ha, CEO of LG Electronics' home appliances unit, said full-year sales would come in below U.S. $10 billion, compared with about $8.5 billion last year. "Probably, it will be difficult to achieve the 20 percent target. The growth we expect to see this year would be in the range of 10 to 15 percent," he said.
Seasonally slower demand for air-conditioners, which have relatively higher margins compared to washing machines and ovens, would also crimp sales in the second half, Young-ha added.
The home appliances division contributes about a quarter of LG Electronics' revenues and 36 percent of its operating profit. Young-ha said operating margins for the home appliances unit would also fall to about 5 to 6 percent in the second half of the year, from 10 percent in the April to June quarter, giving an overall operating margin of about 7 percent for the full year. (Reuters)
to Daily News