Seoul: LG Electronics Inc., South Korea's leading home appliance manufacturer, announced on Friday that its third-quarter net income increased more than fivefold from the previous year due to a base effect. The company's net profit reached 461 billion won (US$323.1 million) for the July-September period, marking a 411.1 percent increase from 90.2 billion won a year ago.
According to Yonhap News Agency, operating profit for the quarter dropped 8.4 percent year-on-year to 688.9 billion won, while sales decreased by 1.4 percent to 21.87 trillion won. Despite this, the operating profit was 14.5 percent higher than the average estimate provided by a survey from Yonhap Infomax, the financial data division of Yonhap News Agency. The net profit estimate was not available.
LG Electronics explained that the significant rise in net income was largely due to a base effect following the final approval last year to transfer its battery pack business to its battery-making affiliate, LG Energy Solution Ltd. The company faced challenges such as higher tariff costs and expenses from a voluntary retirement program in September, which affected third-quarter sales and operating profit. However, the home appliance and automotive components segments showed solid growth.
The company reported that despite challenges such as U.S. tariffs and a temporary demand stagnation in the electric vehicle market, its home appliance and automotive components divisions performed well. Efforts in transitioning the business portfolio also contributed positively. The conventional home appliances division achieved sales of 6.6 trillion won, a 4.7 percent increase from the previous year, and recorded an operating profit of 365.9 billion won, up 3.2 percent.
The TV business saw a decline in sales by 9.5 percent year-on-year to 4.7 trillion won, resulting in an operating loss of 302.6 billion won. Meanwhile, the vehicle component solutions business, a key future growth driver for LG Electronics, reported a 1.4 percent increase in sales to 2.5 trillion won, alongside a record operating profit of 1.5 billion won.
Sales in the heating, ventilation, and air conditioning (HVAC) systems division rose 1.1 percent year-on-year to 2.7 trillion won, although operating profit decreased by 15 percent to 132.9 billion won. LG Electronics stated its intention to continue offering localized products to sustain market leadership and expand business-to-business opportunities, including AI data centers and HVAC systems, to secure future growth drivers.