LG Electronics’ operating earnings down 21 pc due to increased costs

Seoul:  LG Electronics on Tuesday estimated its third-quarter operating profit sank 20.9 per cent from a year earlier, missing market expectations, due to increased logistics and marketing costs.

Its operating profit came to 751.1 billion won ($556.9 million) for the July-September period, down from 905.1 billion won from a year ago, the electronics major said in a regulatory filing.

Sales increased 10.7 per cent to 22.17 trillion won. The company did not provide the data for net income. The quarterly sales marked the largest amount for any third-quarter results.

The operating profit was 22.5 per cent lower than the average estimate, according to a survey by Yonhap Infomax, the financial data firm of Yonhap News Agency.

LG Electronics said in a statement that the weak bottom line is attributable to a hike in maritime transportation fees and marketing costs amid intensifying competition.

But its business-to-business sectors, including electric vehicle components, subscriptions and heating, ventilation and air conditioning (HVAC) businesses, pulled off steady growth in the third quarter.

“While the external environment continues to be challenging, including delayed demand recovery, rising raw material costs, and fluctuations in ocean freight rates, it is meaningful that we are steadily increasing our sales volume,” LG Electronics said in a statement.

“Our efforts to modernise our business portfolio are leading to improved fundamental competitiveness, and we are maintaining our growth momentum.”

The South Korean home appliance giant has made constant efforts to diversify its business portfolio and become a future-oriented company after withdrawing its smartphone business in 2021.

The company said it will release its final earnings report later.

–IANS