Seoul: LG Innotek Co., an electronic component manufacturing unit of LG Group, announced that its first-quarter net profit fell by nearly 40 percent due to declining demand and increased competition.
According to Yonhap News Agency, the company disclosed in a regulatory filing that its net income for the January-March period was 85.6 billion won (US$60.1 million), marking a 38.2 percent decrease from the 138.6 billion won recorded in the same period the previous year. This significant drop in profits occurred despite a 15 percent year-on-year increase in sales, which reached 4.98 trillion won, setting a new record for first-quarter sales in the company's history.
Operating income also experienced a decline, falling 28.9 percent year-on-year to 125.1 billion won. LG Innotek, known as a key supplier of camera modules for Apple Inc.'s iPhone, attributed the lower net income to a slowdown in global demand for electric vehicles (EVs) and stiffening competition within the optics industry.
The company's operating profit was reported to be 3.3 percent below the average estimate, based on a survey conducted by Yonhap Infomax, the financial data arm of Yonhap News Agency.