SEOUL, October 22 (AJP) - Standard & Poor’s on Tuesday upgraded LG Electronics’ credit outlook to “BBB Positive” from “BBB Stable,” the company’s first improvement since October 2022.
The ratings agency cited robust performances in LG’s home appliance and vehicle component businesses, stronger cash flow from its Indian initial public offering, and a rebound at its affiliate, LG Display.
The move came months after Moody’s raised LG’s outlook to “Baa2 Positive" early this year.
S&P’s revision signals expectations of financial improvement over the next one to two years, in contrast to the prior “Stable” rating that suggested steady but unremarkable conditions.
“Despite U.S. tariff hikes, LG’s core businesses continue to show solid results,” S&P said in a statement, highlighting “a major cash influx from the India IPO and a turnaround at LG Display, where LG holds a 36.72 percent stake.”
LG’s home appliance division has maintained its strong market position amid global economic uncertainty, while the company’s air conditioner business is expanding on demand for cooling systems used in data centers. Meanwhile, the vehicle component business continues to improve profitability, supported by a $100 billion order backlog and a more favorable mix of contracts.
S&P said it expects LG Display’s recovery to further strengthen LG Electronics’ financial profile, as the company recognizes those gains through the equity method.
According to LG, the India IPO will generate more than 1.8 trillion won ($1.3 billion), providing additional funds for debt reduction.
* This article, published by Aju Business Daily, was translated by AI and edited by AJP.
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