LG Electronics, South Korea’s second-largest consumer electronics giant, saw its operating profit for 2022 fall year-on-year due to lower demand for consumer electronics caused by the global economic downturn.
The South Korean manufacturer said on Friday it posted operating profit down 12.5% from a year earlier.
The global economic downturn drove up costs for South Korean tech giants Samsung and LG last year, while demand for consumer electronics, which was high during the pandemic, fell.
In the same vein as LG, Samsung also had a difficult end to the year. Samsung’s operating profit fell nearly 70% in the fourth quarter year-on-year as demand for memory chips and smartphones continued to decline.
High-end products get away with it
LG’s decline in operating profit was particularly noticeable in the fourth quarter, with a 90.7% drop from a year earlier.
While general demand for consumer electronics has fallen, demand for high-end products has held up. LG saw its revenue increase 12.9% year-on-year and recorded its highest annual revenue to date.
The South Korean electronics maker said the revenue growth was driven by strong demand for high-end home appliances and automotive components. Its auto components business unit also posted its first profit in 2022, LG said.
A less prosperous period for PCs
However, revenue and operating profit from its TV business fell in 2022 compared to 2021 due to lower demand. Post-pandemic demand for PCs and monitors also fell during the year, the company said.
On the same day, its subsidiary LG Display also announced an operating loss of 875.7 billion won for the fourth quarter due to this weak demand for display panels.
Source: ZDNet.com