LG Electronics achieved its highest-ever second-quarter performance, driven by strong fundamentals in its core businesses, including home appliances and TVs, as well as tangible results from new ventures. The company’s proactive accounting for voluntary retirement costs, which had raised market concerns, has been viewed as a sign of its long-term growth trajectory.
On July 7, LG Electronics announced its preliminary consolidated revenue for the second quarter at 23.8297 trillion won and an operating profit of 1.5788 trillion won. These figures represent increases of 14.9% and 146.9%, respectively, compared to the same period last year, marking the highest revenue and operating profit for any second quarter in the company's history.
The operating profit exceeded the initial market consensus of 1.074 trillion won by 47%, continuing a trend of surpassing 1 trillion won in operating profit for two consecutive quarters.
For the first half of the year, combined revenue reached 47.5569 trillion won, with an operating profit of 3.2525 trillion won, surpassing last year's total annual operating profit of 2.4784 trillion won in just six months.
Despite the inclusion of costs related to voluntary retirement aimed at workforce optimization, LG Electronics achieved results that exceeded expectations. In April, the company implemented a voluntary retirement program targeting senior employees and some in their 40s for the second consecutive year. Given that last year’s costs amounted to approximately 400 billion won, it is estimated that a similar one-time expense was accounted for this year.
LG Electronics stated, "Despite the costs associated with the voluntary retirement program conducted in April, we minimized the impact on profitability through improvements in cost competitiveness across all business areas and proactive management measures."
Additionally, the company benefited from refunds on tariffs paid during exports to the U.S. last year, following a ruling by the U.S. Supreme Court that recognized some illegality in the tariff policies implemented during the Donald Trump administration.
Industry analysts believe that LG Electronics has ultimately expanded its business profitability. The growth in sales of home appliances (HS) and subscription-based products, along with increased high-margin sales in the automotive (VS) division, have collectively driven overall profitability.
The home appliances (HS) division reportedly achieved a high operating profit margin of over 10% due to the successful launch of subscription-based products. In particular, the premium product sales in the TV sector, including OLED models, and the rollout of the proprietary platform 'webOS' have contributed to improved margins.
The automotive (VS) division has also expanded its premium infotainment sales based on a strong order backlog, effectively serving as a key cash cow in the business-to-business (B2B) sector. After ten years since its establishment, the division's order backlog has surpassed 100 trillion won, solidifying its role as a core growth driver for the company.
Notably, the future growth areas of heating and cooling (ES) and robotics are also showing promising results. The quality testing for the 'AI cooling system for data centers' aimed at North American hyperscale customers, where power demand has surged, is currently nearing completion. Once orders are finalized, tangible contributions to performance are expected within the next six months.
In the robotics sector, in collaboration with NVIDIA, LG Electronics is enhancing algorithms through 'physical AI,' moving beyond simple hardware supply to develop platform capabilities.
LG Electronics concluded, "We will continue to build a sustainable profit structure through the advancement of our high-profit business model and proactive risk management."
* This article has been translated by AI.
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