LG Electronics Inc. (LG) has announced third-quarter 2021 consolidated revenues of 1.752 trillion shillings, an increase of 22% from the same quarter last year, and the highest quarterly revenue in the history of the company.
Growth in sales of premium home appliances and entertainment products such as OLED and large screen TVs powered the strong Q3 2021 performance, shrugging off supply chain constraints especially semi-conductors, due to the impact of Covid-19.
Profitability also increased significantly during the quarter but was partially offset by a one-time charge. Operating profit of USD 466.99 million (Ksh. 50.42 billion) was 49.6% lower than the third quarter the previous year, reflecting a provision of USD 415 million (Ksh44.8 billion).
The LG Home Appliance & Air Solution Company posted third-quarter 2021 revenues of USD 6.1 billion (Ksh. 658.8 billion) with operating profit of USD 436.51 million (Ksh 47.08 billion).
Sales increased by 14.7% from the same quarter, 2020 on the back of strong growth in the Americas and Europe.
Product competitiveness and operational efficiencies are expected to help LG maintain growth momentum although at a slower pace due to rising raw material costs.
The LG Home Entertainment Company achieved third-quarter 2021 sales of USD 3.61 billion (Ksh. 389.86 billion), 13.9 percent higher than the same period last year.
This was driven in large part by steady growth in demand for premium products such as OLED and large-screen TVs in the key markets of North America and Europe. Operating profit declined compared to the same period last year due to an increase in component prices such as LCD panels.
The LG Vehicle Component Solutions Company recorded revenues of USD 1.5 billion (Ksh. 162 billion). However, there was an operating loss of USD 464.32 million or Ksh. 47.98 billion related to General Motors’ recall of the Chevy Bolt EV.
Although the industry saw an increase in demand for automobiles including EVs during the quarter, the global automotive market experienced significant disruption due to the shortage of semiconductors. LG now says it will focus on strengthening its global supply chain through greater collaboration with auto OEMs and other component providers.
The LG Business Solutions Company increased sales in the period under review due to growing demand for information display products, PCs and monitors as well as the gradual recovery of the B2B segment.
Higher prices of major components including LCD panels, semiconductors and solar wafers coupled with an increase in global logistics costs had an impact on operating profits. The company plans to grow its share of the recovering B2B segment while improving product competitiveness and operational efficiencies.