Sales on a global basis (including overseas subsidiaries) grew 13.8% to KRW 14.497 trillion (approx. US$11.229 billion) year-on-year. Operating profit jumped to KRW 1.133 trillion (approx. $878 million) resulting in a margin of 7.8%, which is 1.1% higher than the previous year. On a parent basis the company recorded sales of KRW 8.477 trillion (approx. $6.566 billion) and an operating profit of KRW 714 billion (approx. $553 million).
The Home Appliance Company reported an increase of 9.8% to KRW 2.339 trillion (approx. US$1.812 billion) year-on-year. Currency impacts resulted in sales declining 14% on a USD base but growing 10% for Korean won.
Continuing problems in the housing market slowed the pace of recovery of the home appliances industry. LG credits the competitiveness of its products with helping it achieve an operating margin of 7.7%, 2.9% higher from a year earlier, at KRW 181 billion (approx. $140 million).
Looking at the third quarter, market demand is expected to shrink year-on-year due to the ongoing recession, but that decline is expected to slow down.
LG's Air Conditioning Company saw sales rise 1.8% to KRW 1.720 trillion (approx. $1.332 billion) year-on-year with sales falling in U.S. dollars but increasing in Korean won. Operating margin resulted in a profit of KRW 175 billion (approx. $136 million) due to the growth in demand for premium models.
Despite the recession, LG foresees its market share growing in the third quarter in Korea, Europe, Australia, and other markets in the southern hemisphere, thanks to more energy efficient commercial air-conditioners and inverter-embedded residential products.
Other LG Businesses
The Home Entertainment Company saw sales rising by 19.3% to KRW 4.509 trillion, for a profit of KRW 224 billion (approx. $174 million). Flat panel TV sales were robust, particularly LCD TVs, and shipments rose 45% year-on-year to 4.28 million units.
The Mobile Communications Company reported KRW 5.140 trillion (approx. $3.981 billion) in sales, up 25.8% over the previous year, and operating profit of KRW 545 billion (approx. $422 million). Handset sales were up 29.9%. Shipments of handsets recorded an increase of 7.8% year-on-year and 32% quarter-on-quarter to 29.82 million units. With the global economic downturn expected to continue, LG expects the global handset market to decline more than 6% to about 280 million units in the third quarter, but expects its own shipments to continue to grow.