Seoul: LG Electronics Inc., a major player in the home appliance industry in South Korea, announced on Monday a significant decline in its second-quarter operating profit, with figures showing a drop of over 46 percent compared to the previous year. This decrease has been attributed primarily to escalating logistics and tariff expenses.
According to Yonhap News Agency, LG Electronics reported an estimated operating profit of 639.1 billion won (approximately US$467.2 million) for the quarter ending in June, marking a 46.6 percent decline from the same period last year. The company's revenue also saw a decrease, falling 4.4 percent on-year to 20.74 trillion won. However, data concerning net profit remains unavailable at this time.
The operating profit figures were 15.2 percent lower than the average market expectations, as per a survey conducted by Yonhap Infomax, the financial data division of Yonhap News Agency. The company plans to release its final earnings report soon.
LG Electronics attributed this downturn in profitability to ongoing unfavorable business conditions during the second quarter, largely influenced by changes in U.S. trade policy. The company highlighted increased tariff costs, particularly those related to steel and aluminum, alongside rising logistics expenses and heightened market competition, as primary factors affecting its financial performance.
Despite these challenges, LG Electronics reported growth in its business-to-business (B2B) operations, which include electric vehicle (EV) components, subscription services, and heating, ventilation, and air conditioning (HVAC) systems. The company emphasized its strategy to continue expanding its B2B and subscription-based ventures to bolster its long-term business foundations.